The Prevention of Money Laundering Act, 2002: Offence, Attachment and Safeguards
This article sets out how the Prevention of Money Laundering Act, 2002 (PMLA) defines and punishes money laundering, how provisional attachment differs from confiscation, and what a practitioner should check when a client is drawn into an enforcement inquiry.
The Act is increasingly met by chartered accountants, company secretaries and advocates whose clients hold property or accounts that an agency links to a crime. A clear understanding of the stages of the process is the first step in advising on it.
1. What the Act addresses
Money laundering is the process by which money or property obtained through crime is made to look legitimate. It can take the form of buying property, investing in a business or moving funds through a series of accounts. The PMLA provides for the prevention of money laundering and for the confiscation of property that is derived from, or involved in, it.
Section 3 defines the offence of money laundering. Section 4 prescribes the punishment. The Act then deals with investigation, attachment of property, adjudication and prosecution before the competent Special Court.