Syllabus: Where to use?
Governance | Mains Paper 2: Governance, Transparency & Accountability, Citizens Charters
Prelims level: Particulars of PMLA, ED.
Mains level: Corruption and transparency
CORRUPTION CHALLENGES – LOKPAL, POCA, ETC
At least 17 Opposition parties have anointed as “dangerous” the recent Supreme Court judgement upholding amendments made in 2019 to the Prevention of Money Laundering Act (PMLA), giving more authority to agencies such as the Enforcement Directorate (ED).
What are the concerns about this verdict?
- Violate fundamental rights: Petitions were filed against the amendments, which the contestants asserted would disregard personal liberty, procedures of law and the constitutional decree.
- Complex process: The petitioners included many veteran politicians who all argued that the “process itself was the penalty”.
- Coercion of ED: There were proposals that the accused’s right against self-incrimination suffered when the ED hailed them and drove them to sign statements on perils of the arrest.
What is PMLA?
Prevention of Money Laundering Act, 2002 is an Act of the Parliament of India legislated by the government to prevent money laundering and to deliver confiscation of property emanated from money laundering.
What is money laundering?
Money laundering is the procedure of covering the origin of money, obtained from illegal activities such as drug trafficking, corruption, embezzlement or gambling, by altering it into a legitimate source.
What is ED?
The Directorate of Enforcement is a law enforcement agency and economic intelligence agency accountable for enforcing economic laws and fighting economic criminality in India. It is the stake of the Department of Revenue, Ministry of Finance under the Government Of India.
What acts does it cover?
- Prevention of Money Laundering Act (PMLA)
- Fugitive Economic Offenders Act
- Foreign Exchange Management Act
- Foreign Exchange Regulation Act (FERA)
Roles and functions of the ED
- Summon, Search and Seizures: The ED carries out probe(property) and seizure (money/documents) after it has determined that the money has been laundered, under Section 16 (power of survey) and Section 17 (search and seizure) of the PMLA.
- Arrest and detentions: Based on that, the management will decide if the detention is required as per Section 19 (power of arrest).
- Attachment of property: Under Section 50, the ED can also instantly carry out a search and seizure without contacting the person for examination. It is not essential to muster the person first and then begin with the search and seizure.
- Filing of charge sheet: If the person is charged, the ED gets 60 days to file the prosecution complaint (charge sheet) as the penalty under PMLA doesn’t go further than seven years.
Why ED is consistently in the spotlight?
Selective class war: The ED has frequently been slammed for instigating investigations, raiding and contesting leaders of opposition parties, be it under the current government or past governments.
Why ED is on target?
- Huge discretions: The ED is the only Central agency in the nation that does not need approval from the government to summon or charge politicians or government officials for committing economic offences like money laundering.
- Used for petty crimes: PMLA is drawn into the investigation of even “ordinary” crimes and assets of authentic victims have been connected.
- Actual purpose denigrated: PMLA was a thorough penal statute to counter the threat of money laundering, especially arising from the trade in narcotics.
- Violations of Rights: PMLA was legislated in reply to India’s global commitment to fight the threat of money laundering. Rather, rights have been “cribbed, cabined and contained”.
Issues with PMLA
- Misuse of central agencies: PMLA is being drawn into the investigation of even ordinary crimes by the Enforcement Directorate.
- Seizing of assets: Assets of genuine victims have been attached. The ED could just step into anybody’s house.
- Politically motivated raids: In all this, the absolute purpose of PMLA to examine the conversion of “illegitimate money into legitimate money” was mislaid.
- The opacity of charges: Petitioners filed out that even the Enforcement Case Information Report (ECIR), an equivalent of the FIR is considered an “internal document” and not given to the accused.
- Vagueness over evidence: The charged is called upon to make assertions that are treated as acceptable in proof.
- Harassment: The ED begins to call charged persons and seeks facts about all their financial transactions and their family fellows.
- Against individual liberty: The initiation of an investigation by the ED has outcomes that have the possibility of shrinking the privilege of an individual.
- It is unlikely that criminality can be substantially declined without altering the way government agencies work.
- The battle against corruption is discreetly conjoined with the reform of the investigations.
- Therefore the adjudicating authorities must operate in collaboration and guarantee the loftiest standards of translucency and righteousness.