• UGI USER
  • Jul 13, 2024
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SUPREME COURT LIMITS ED’S ARREST POWERS UNDER PMLA

Why in the news?

  • SC criticises ED, insists PMLA arrests based on evidence.
  • Questions ED’s inconsistent arrest policy, calls for fairness.
  • Section 19(1) of PMLA grants ED significant arrest powers, and must uphold constitutional rights.
source:gbu

About Prevention of Money Laundering Act(PMLA):

  • Objective: Prevent money laundering and confiscate illicitly obtained property.
  • Enforcement: Managed by Enforcement Directorate (ED) under Ministry of Finance.
  • Punishment: Offenders face rigorous imprisonment up to seven years and unlimited fines.

PMLA Enactment and Objectives:

  • Enacted :in January 2003 to combat money laundering.
  • Controls money laundering, confiscates laundered property, and addresses related issues.
  • Proposes punishment under Section 4.
  • Recent Amendments: 2019 amendment allows restoration claims for confiscated property; 2023 amendment expands NGO disclosure requirements and defines “Politically Exposed Persons” per FATF recommendations.
What is Section 19 of PMLA?

  • Section 19 of PMLA: Accused must be informed of arrest grounds “as soon as may be.”

About Enforcement Directorate (ED):

  • Enforcement Directorate (ED): Established in 1956, it investigates money laundering and foreign exchange violations.
  • Enforces FEMA, 1999, and certain PMLA provisions.
  • Functions: Enforces PMLA, FEMA, and FEOA.
  • Administration: Operates under the Department of Revenue, Ministry of Finance.

Associated Article:

https://universalinstitutions.com/the-pmla-a-law-that-has-lost-its-way/