The Centre is mulling introducing a new bill in Parliament to amend the Prevention of Money Laundering Act (PMLA). This amendment aims to align the PMLA with amended criminal laws and formally incorporate a “restitution of attached properties” clause, enabling banks to reclaim assets from alleged economic offenders, per a report by the Hindustan Times quoting senior officials involved in the consultations.
The discussions on the Prevention of Money Laundering (Amendment) Bill, 2024, started before the Lok Sabha elections. The finance ministry has sought feedback from the Ministry of Home Affairs (MHA), the Enforcement Directorate (ED), the Financial Intelligence Unit (FIU), the Central Board of Indirect Taxes and Customs (CBIC), and other stakeholders, the report said.
A procedural change proposed in the amendment bill is the reduction of offences listed in Part A of the Scheduled Offences of the PMLA, decreasing from 43 offences under the Indian Penal Code (IPC) to 31, due to the merging of various sections in the Bharatiya Nyaya Sanhita (BNS), the new legal code that replaces the IPC from July 1.
Special acts under which the ED currently prosecutes cases, such as the Unlawful Activities (Prevention) Act, Explosives Act, Arms Act, Narcotic Drugs and Psychotropic Substances (NDPS) Act, Wildlife Protection Act, Prevention of Corruption Act, and the Information Technology Act, will remain unchanged in the PMLA schedule.
Officials noted that newly introduced sections in the Bharatiya Nyaya Sanhita (BNS), such as organised crime (section 109) and terrorism activities (section 113), may also be included in the PMLA schedule.
The inclusion of a “restitution of attached assets” clause—recently adopted by the ED—is under consideration for formal introduction in the amended PMLA, according to the HT report.
The central agency has been proactive in transferring attached assets to investors or banks in money laundering investigations. To date, public sector banks have received Rs 15,184 crore out of a total of Rs 22,586 crore defrauded by fugitive businessmen Vijay Mallya, Nirav Modi, and Mehul Choksi.
During the Lok Sabha election campaign, Prime Minister Narendra Modi said that he was seeking legal advice on returning the money seized by the ED to the public.
The Supreme Court is currently reviewing several provisions of the PMLA, including its powers to conduct inquiries, arrest, and attach property. Over 200 petitions have been filed challenging the top court’s July 2022 decision, which upheld the constitutional validity of various PMLA provisions. Critics argue that the ED’s powers to arrest, force confessions, and seize property are excessive. The Supreme Court is expected to address these issues next month.
