The IUP Journal of Law Review
The Prevention of Money Laundering Act, 2002: Caveat Emptor

Article Details
Pub. Date : Oct, 2019
Product Name : The IUP Law Review
Product Type : Article
Product Code : IUPLR21910
Author Name : D Ganesh Kumar and Akshay D Gudinho
Availability : YES
Subject/Domain : Law
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No. of Pages : 11

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Abstract

This paper seeks to gauge the attention of constitutional functionaries and legal practitioners generally, and homebuyers specifically by highlighting a few discrepancies in the Prevention of Money Laundering Act, 2002. The said Act has been amended a number of times since its first enactment owing to the growing emphasis on curbing money laundering in the political narrative in India. In drafting the law and empowering the enforcement agencies, the Parliament has sought to tackle the problem of money laundering and weed out the proceeds of crime hidden in the deepest crevices of the financial system. However, in doing so, has the Parliament gone a few steps too far? This paper seeks to answer this very question in the affirmative. The paper deals with the constituents of the "proceeds of crime"in tandem with the offense of money laundering under the said Act prior to and after the Prevention of Money Laundering (Amendment) Act, 2012. Pursuant thereto, the nature of the attachment and confiscation proceedings under the said Act have been discussed. Thereafter, how the said amendment works to the bereavement of bona fide homebuyers is dealt with on three counts: (i) the right to property; (ii) the burden of proof, and (iii) wrongful attachment of property. The paper concludes with a few alternative interpretations to the said Act provided by the Indian Judiciary which supports the suggestions made by the authors to remedy discrepancies highlighted in the Act.


Description

The Prevention of Money Laundering Act, 20021 (the "Act") was enacted after India adopted the general principles against money laundering in the Political Declaration and Global Program of Action, adopted by the United Nations General Assembly (UNGA) on February 23, 1990 and the Political Declaration adopted by the UNGA on June 8 to 10, 1998. However, it was the Financial Action Task Force (FATF) on money laundering, which was an intergovernmental organization founded in 1989 by the G7 countries, that was the first large-scale initiative against money laundering.

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