THE Prevention of Money Laundering Act (PMLA) is one of the most potent weapons in Prime Minister Narendra Modi’s relentless campaign against corruption in high places. The campaign received a shot in the arm on April 5 when the Supreme Court threw out a petition filed by 14 political parties alleging that the central investigating agencies, such as ED and the CBI, were being weaponised by the Modi Government to clamp down on dissent.
The Congress and other Opposition parties were caught on the wrong foot when the Supreme Court said that political leaders cannot claim a higher immunity than ordinary citizens and hence, a special set of guidelines cannot be issued for them.
The ambit expanded
While upholding the constitutionality of provisions under the PMLA provisions relating to the ED’s power to attach assets, conduct search-andseizure, and arrest individuals, last year the Supreme Court had held that it is in the interest of the state to provide law enforcement agencies with a proportionate and effective mechanism to deal with money laundering offences.
Taking a cue from the apex court’s observations, the Modi Government has now expanded the ambit of those covered under the PMLA. The Government’s determination to strengthen the law and the system against money laundering is unexceptionable, given that curbing black money and formalisation of the economy are its declared policy priorities.
Over the last few years, it has acted on these objectives quite convincingly. The new rules strike at the base of the strategy of using front companies to launder ill-gotten cash. Professionals such as chartered accountants, company secretaries and cost accountants have now been brought under the ambit of the money laundering law in the country.
Enforcement stepped up
The truth is that the provisions of the Prevention of Money Laundering Act are in compliance with the global standard set by the Financial Action Task Force (FATF) and a part of the intergovernmental response to organised crime, PMLA was enacted in 2002 and implemented on July 1, 2005. Though it was passed by India as part of international conventions, it was not used by the previous UPA Government effectively to bring the corrupt to the book.
Immediately after coming to power in 2014, the Modi Government ordered the investigating agencies to step up PMLA enforcement with vigour. Compared to only 112 raids and the attachment of Rs 5,346 crore proceeds of crime between 2004-05 and 2013-14, the ED carried out 3,010 raids and attached proceeds of crime worth Rs 99,356 crore under the PMLA since the Modi Government came to power.
Similarly, while only 8,586 investigations were taken up for violation of Foreign Exchange Management Act (FEMA) by the federal agency between 2004-05 and 2013- 14, the number rose to 22,320 over the following eight years.
Convictions go up
During the UPA regime, not a single accused was convicted by any court across the country for money laundering and no property was confiscated. In contrast, 3,010 searches were conducted during the last eight years which resulted in attachment of proceeds of crime worth Rs 1 lakh crore and filing of over 900 charge-sheets by the Modi Government. The central agency has registered 3,555 PMLA cases since April 1, 2014 till Marchend this year. Contrary to opposition charges, the ED has secured a record 98 per cent conviction in cases where trials are over.
