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NEW DELHI: The Supreme Court‘s decision to review the Prevention of Money Laundering Act, for the second time, may lead to inordinate delay in trials of several money laundering cases as the accused could seek deferment of trial proceedings on the ground of pendency of the matter before the SC, just like they did when it came up for review last year.
Delay in trials will have an immediate impact on India’s ongoing proceedings before the Paris-based inter-governmental body Financial Action Task Force (FATF) that is looking at the effectiveness of the country’s anti-money laundering and counter-terror financing regime. India has repeatedly sought extensions of the review deadline which has now been postponed to June next year.
The ED, in its affidavit before the SC recently, had submitted that its previous judgment delivered in July last year, authenticating the PMLA laws, was the basis for submitting the effectiveness of the laws before the FATF. The copy of the judgment (dated July 27, 2022) was supplied to FATF assessors to demonstrate the alignment with FATF standards, it said.
“Therefore, the hearing of the review petition and consequent media reporting in respect of the proceedings to be held in the matter may adversely impact India’s national interest,” the agency argued.
The FATF review of India’s case is in a “critical stage” with the agency having submitted documentary details on effectiveness of its PMLA regime – number of investigations constituted, prosecution complaints (chargesheets) filed and number of offenders prosecuted. Already, delay in trials have led to a very low number of prosecutions, something that may go against India’s claim of its money laundering and counter-terror financing (ML/CFL) regime being effective.
The ED has instituted more than 5,900 investigations under the PMLA and filed over 1,100 prosecution complaints. However, in the 17 years since the Act came into force, it has managed to obtain only 24 convictions. The reason for such a low level of convictions, according to the agency, is slow paced trials in most cases. Of the 25 cases in which trials were completed, 24 resulted in convictions, with only one acquittal.
The agency has urged the SC to postpone the review considering the FATF evaluation which has scheduled a visit by its team in November to assess the effectiveness of the PMLA regime. It said the entire Act was based on the recommendations of the FATF which was established in 1989 and is followed by more than 200 countries.
Delay in trials will have an immediate impact on India’s ongoing proceedings before the Paris-based inter-governmental body Financial Action Task Force (FATF) that is looking at the effectiveness of the country’s anti-money laundering and counter-terror financing regime. India has repeatedly sought extensions of the review deadline which has now been postponed to June next year.
The ED, in its affidavit before the SC recently, had submitted that its previous judgment delivered in July last year, authenticating the PMLA laws, was the basis for submitting the effectiveness of the laws before the FATF. The copy of the judgment (dated July 27, 2022) was supplied to FATF assessors to demonstrate the alignment with FATF standards, it said.
“Therefore, the hearing of the review petition and consequent media reporting in respect of the proceedings to be held in the matter may adversely impact India’s national interest,” the agency argued.
The FATF review of India’s case is in a “critical stage” with the agency having submitted documentary details on effectiveness of its PMLA regime – number of investigations constituted, prosecution complaints (chargesheets) filed and number of offenders prosecuted. Already, delay in trials have led to a very low number of prosecutions, something that may go against India’s claim of its money laundering and counter-terror financing (ML/CFL) regime being effective.
The ED has instituted more than 5,900 investigations under the PMLA and filed over 1,100 prosecution complaints. However, in the 17 years since the Act came into force, it has managed to obtain only 24 convictions. The reason for such a low level of convictions, according to the agency, is slow paced trials in most cases. Of the 25 cases in which trials were completed, 24 resulted in convictions, with only one acquittal.
The agency has urged the SC to postpone the review considering the FATF evaluation which has scheduled a visit by its team in November to assess the effectiveness of the PMLA regime. It said the entire Act was based on the recommendations of the FATF which was established in 1989 and is followed by more than 200 countries.
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