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AMENDMENTS TO PREVENTION OF MONEY LAUNDERING ACT, PUBLIC FINANCE - Coggle…
AMENDMENTS TO PREVENTION OF MONEY LAUNDERING ACT
Context:
With the assent of President, the Finance Act, 2019 brought some changes to the Prevention of Money Laundering
Act, 2002.
Changes in the Act
⦁ Money Laundering will be treated as a stand-alone crime.
Prevention of Money Laundering Act
• It is the legal framework in India to combat money laundering.
• The provisions of this act are applicable to all financial institutions, banks(Including RBI),mutual funds, insurance companies, and their financial intermediaries.
• It defined ‘money laundering’ as any processor activity connected with proceeds of crime activity connected with proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming It as untainted property
Enforcement Directorate (ED)
⦁ It is a law enforcement and economic intelligence agency responsible for enforcing economic laws and fighting economic crime in India.
⦁ It is a multi-disciplinary organization mandated with the task of enforcing Foreign Exchange Management Act (FEMA), 1999 and Prevention of Money Laundering Act (PMLA), 2002.
⦁ The administrative control of ED is under Department of Revenue (Ministry of Finance).Global Efforts to combat Money Laundering
⦁ 1988 Vienna Convention – Criminalizes the money laundering for drug trafficking.
⦁ 1990 Council of Europe Convention – Establishes a common criminal policy on money laundering.
⦁ G10’s Basel Committee on banking Supervision – They issued a ‘statement of principles’.
⦁ Steps taken by Financial Action Task Force (FATF).
Financial Action Task Force (FATF)
⦁ It is the main international body engaged in continuous, comprehensive efforts both to define policy and to promote the adoption of countermeasures against money laundering.
⦁ It is an inter-governmental organizationset up by the governments of the G-7 countries at their 1989 Economic Summit.
⦁ The FATF is therefore a “policy-making body” which works to generate the necessary political will to bring about national legislative and regulatory reforms.
⦁ Its headquarters is in Paris, France.
⦁ The FATF meeting is conducted thrice in a year.
⦁ The Enforcement Directorate (ED) is empowered to make money laundering investigation.
The jurisdiction of the Special Court shall not depend upon any orders passed in respect of the scheduled offence under the act.
⦁ The ED officers are empowered to arrest an accused without warrant as all PMLA offences will be cognizable and non-bailable
⦁ The changes expanded the scope of ‘proceeds of crime’ which includes concealment, possession, acquisition, use and projecting or claiming it as untainted money or property will be treated as independent offences under the act.
⦁ For inter-departmental and inter-agency coordination, the centre is empowered to set up an Inter-Ministerial Coordination Committee.
PUBLIC FINANCE