Prevention of Money Laundering Act, 2002 (PMLA)
Overview
The Prevention of Money Laundering Act, 2002 (PMLA) is a law in India aimed at preventing and controlling money laundering and related offenses. It was enacted in 2002 and came into effect on July 1, 2005, replacing the earlier Prevention of Money Laundering Act, 1998. The law provides for the establishment of a financial intelligence system headed by the Financial Intelligence Unit – India (FIU-IND) to check money laundering activities. The Act also establishes special courts to try cases related to money laundering. It has been further amended in 2009, 2012, and 2017.
Key Provisions
-
Definition of Money Laundering: The Act defines money laundering as any attempt to indulge, directly or indirectly, in activities connected with the proceeds of crime and projecting it as untainted property. Individuals engaging in such activities are guilty of money laundering.
-
Financial Intelligence Units: The FIU-IND is responsible for collecting, analyzing, and disseminating information related to suspected money laundering activities.
-
Special Courts: The Act provides for the establishment of special courts to try offenses related to money laundering, ensuring speedy trials and effective enforcement.
-
Suspicious Transactions Reporting: Every banking company must furnish details of suspicious transactions, whether made in cash or otherwise, to the authorities for investigation and action.
Amendments
The Act has undergone several amendments to strengthen its provisions:
-
2009 Amendment: Enhanced the powers of authorities to investigate and combat money laundering.
-
2012 Amendment: Introduced stricter penalties and expanded the scope of the Act.
-
2017 Amendment: Further strengthened the regulatory framework and compliance requirements.