Money laundering is a serious issue. But SC verdict on PMLA is problematic

Money laundering is a serious issue. But SC verdict on PMLA is problematic

Subject: Polity

Section: National Organisation

Context : Recent SC judgement

What is the recent verdict?

• Enforcement Case Information Report (ECIR) cannot be equated with an FIR, and ED officers are not mandated under law to register an ECIR before initiating investigation or at any other stage of the case
• Supplying of Enforcement Case Information Report (ECIR) is not mandatory and disclosure of reasons during arrest is enough
• Authorities under the PMLA (ED officers) are not the same as police officers and the evidentiary value granted to statements of witnesses and accused persons recorded by the ED (Section 50) is not ultra vires Article 20 of the Constitution (that provides the right against self incrimination)
• The powers of arrest granted to the ED under Section 19, PMLA are in sync with purpose of the statute
• Mere possession of proceeds of crime (without any integration, layering etc.) are sufficient to allege money laundering
• The “twin conditions” under Section 45 of the Act, dictate that a court can grant bail only if it is satisfied that there are reasonable grounds for believing that the accused is not guilty of such offence AND that he is not likely to commit any offence while on bail.

Vienna Convention on Money Laundering

• It was the first major initiative in the prevention of money laundering held in December 1988.
• This convention laid down the groundwork for efforts to combat money laundering by obliging the member states to criminalize the laundering of money from drug trafficking.
• It promotes international cooperation in investigations and makes extradition between member states applicable to money laundering.
• The convention also establishes the principle that domestic bank secrecy provisions should not interfere with international criminal investigations.

Palermo protocols

• The Palermo protocols are three protocols that were adopted by the United Nations to supplement the 2000 Convention against Transnational Organized Crime (the Palermo Convention). They are:
  • the Protocol to Prevent, Suppress and Punish Trafficking in Persons, especially Women and Children; and
  • the Protocol against the Smuggling of Migrants by Land, Sea and Air.
  • the Protocol against the Illicit Manufacturing and Trafficking in Firearms, Their Parts and Components and Ammunition
• These protocols and convention fall within the jurisdiction of the United Nations Office on Drugs and Crime.

Relevant Articles

Article 20 : Protection in respect of conviction for offences

(1) No person shall be convicted of any offence except for violation of a law in force at the time of the commission of the Act charged as an offence, nor be subjected to a penalty greater than that which might have been inflicted under the law in force at the time of the commission of the offence.

(2) No person shall be prosecuted and punished for the same offence more than once.

(3) No person accused of any offence shall be compelled to be a witness against himself.

Article 253 : Legislation for giving effect to international agreements.

Notwithstanding anything in the foregoing provisions of this Chapter, Parliament has power to make any law for the whole or any part of the territory of India for implementing any treaty, agreement or convention with any other country or countries or any decision made at any international conference, association or other body