The Prevention of Money Laundering Act (PMLA) of 2002 was initially designed to tackle the pressing issue of illicit funds generated from international drug trafficking. However, over time, the scope of the law has expanded significantly, extending beyond its original purpose.
This evolution has prompted concerns regarding its alignment with its initial objectives and its impact on principles of justice, notably exemplified by the contentious bail provision under Section 45, which seemingly undermines the presumption of innocence.
Emergence of PMLA
Addressing a Growing Threat
The Prevention of Money Laundering Act (PMLA), 2002, was conceived in response to the escalating issue of black money stemming from international drug trafficking. This illicit wealth posed a significant risk to the stability of economies worldwide, prompting urgent action.
Global Initiatives
United Nations efforts, notably the 1988 Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, highlighted the imperative for nations to combat money laundering. Subsequent resolutions and the establishment of the Financial Action Task Force (FATF) underscored the need for coordinated international action against this menace.
Focus on Drug Money
Initial Objective
The PMLA initially targeted the laundering of drug money, reflecting widespread concern over the integration of proceeds from the drug trade into the legitimate economy. This focus was rooted in the recognition of drug-related finances as a significant threat to global economic stability and national sovereignty.
Scope Expansion
Despite its original mandate, amendments to the PMLA broadened its scope to include offenses beyond drug-related crimes. While this expansion altered the law’s character, the core objective remained centered on addressing the vast sums of illicit funds generated by the international drug trade.
Legal Framework of PMLA
Enactment under Article 253
The Prevention of Money Laundering Act (PMLA) was passed by India’s Parliament under Article 253, which authorizes legislation to implement international conventions. This provision restricts the scope of such laws to the subject matter of the relevant international decision. However, subsequent amendments expanded the PMLA’s coverage beyond drug-related offenses, incorporating various other offenses into its schedule.
Deviation from Original Intent
Close scrutiny reveals a departure from the PMLA’s original focus on drug-related crimes. Provisions initially intended to combat drug trafficking have been applied to offenses unrelated to drug money laundering. For instance, the inclusion of the Prevention of Corruption Act, 1988, in the PMLA’s schedule extends its rigorous provisions to public servants, equating them with hardened drug traffickers.
Presumption of Guilt and Denial of Bail
Reversal of Legal Principle
The PMLA undermines the fundamental legal principle of presumption of innocence until proven guilty. Section 45 of the PMLA dictates that bail may only be granted if the judge is convinced of the accused’s innocence, effectively presuming guilt. This provision starkly contrasts with established Anglo-Saxon jurisprudence.
Consequences of Bail Provision
The stringent bail provision in the PMLA poses significant challenges for accused individuals. Judges may hesitate to grant bail due to the requirement of proving innocence, leading to prolonged incarceration without trial. This departure from traditional legal norms raises concerns about the fairness and efficacy of the PMLA’s enforcement.
Source: The PMLA — a law that has lost its way (The Hindu, April 2, 2024)