7 Years Ri For Money Laundering

All financial institutions and intermediaries will have to record transactions exceeding Rs 25 lakh within a month , according to the Prevention of Money Laundering Bill, which was cleared by the cabinet last Friday. These records will have to be furnished to the Commissioner of Income Tax.

This information would be utilised by the enforcement agency, in consultation with the Reserve Bank of India, to investigate offences under the Money Laundering Prevention Act.

According to the Bill: "whoever acquires, owns, possesses or transfers any proceeds of crime; or enters into any transaction which is related to proceeds of crime either directly or indirectly; or conceals... proceeds of crime, commits the offence of money laundering".

 

The proceeds of crime involved in money laundering relate to any offence under the Indian Penal Code, Immoral Traffic (Prevention) Act, Arms Act, Narcotic Drugs and Psychotropic Substances Act, and Prevention of Corruption Act. Therefore, the proposed Act would function as a holding Act for all these laws, above a threshold level to be specified by the Centre.

The Bill states: "whoever commits the offence of money laundering shall be punishable with rigorous imprisonment for a term which shall not be less than three years but which may extend to seven years and shall also be liable to fine which may extend to five lakh rupees". The violations of the provisions of the Narcotic Drugs and Psychotropic Substances Act, 1985, constitute the most serious offences under the proposed Bill and the Director is empowered to attach the laundered property in drug related cases soon after the case is filed before the court. However, in other cases, the property would be attached only for a period of ninety days or till the end of adjudication of the matter. A separate directorate would be set up to implement the Prevention of Money Laundering Act which would enjoy the same powers of a civil court. The officers of the directortae owuld enjoy powers similar to those conferred on Income Tax officers. However, the Bill proposes to empower the Director, the deputy director or any other authorised officer to arrest a person if he has reason to believe that the person is guilty under the Act.

The Bill envisages that officers of the newly set up directorate would be assisted by officers of other revenue departments namely those of the Customs and Central Excise Departments, those appointed under the Narcotic drugs and Psychotropic Substances Act, Income Tax officers, officers of the Securities and Exchange Board of India, Police officers and other officers of the Central and State governments. The Bill states: "The Central Government may, by notification, make rules for carrying out the provisions of this Act (which includes) the form in which records referred to in this Act may be maintained, the manner in which and the conditions subject to which the properties confiscated may be received and managed, the additional matters in respect of the Adjudocating Authority may exercise the powers of the civil court...nad any other matter which is required to be or may be prescribed".