The PMLA - a law that has lost its way (GS Paper 2, Polity & Governance)
Context
- The most serious aspect of the Prevention of Money Laundering Act (PMLA) is the inclusion of offences which have nothing to do with the original motive namely, to combat the laundering of drug money.
PMLA
- The Prevention of Money Laundering Act (PMLA), 2002 was enacted with a distinct objective.
- The humongous volume of black money generated through international drug trafficking posed a grave threat to the economy of many countries.
- There was widespread realisation that the black money generated through the flourishing drug trade and integrated into the legitimate economy was likely to destabilise the world economy and endanger the integrity and sovereignty of nations.
The background to the law is important:
- The United Nations took serious note of this, and in 1988, held the United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances.
- All countries were urged to take urgent steps to prevent the laundering of the proceeds of drug crimes and other connected activities.
- Subsequent to this, seven major industrial nations held a summit in Paris and established the Financial Action Task Force (FATF) to examine the problem of money laundering and recommend measures to tackle this menace.
- Thereafter, in 1990, the United Nations General Assembly adopted a resolution, namely, the Political Declaration and Global Programme of Action which called upon all member-countries to enact suitable pieces of legislation to effectively prevent the laundering of drug money.
- In pursuance of this resolution of the UN General Assembly, the Government of India used the recommendations of the FATF to formulate a legislation to prevent drug money laundering.
The PMLA's enactment and issues:
- Further, the PMLA was enacted by India's Parliament under Article 253 which empowers it to make laws for implementing the international conventions.
- This Article indicates that a law Parliament makes to implement any decision of an international body will be confined to the subject matter of that decision.
- Item 13 in the Union list of the Seventh Schedule of the Constitution is specific on this point.
- A close look at the schedule will convince a man of ordinary prudence that this law has deviated from its original scheme.
- The provisions contained in it are draconian which were meant to deal with the dangerous men involved in drug trafficking and the money chain.
- These provisions are now being used in other scheduled offences too without mitigating their rigour.
- Offences which by their very nature do not generate crime proceeds of a scale which can destabilise the economy and endanger the sovereignty of the nation are being tried under this law.
- One such example is the Prevention of Corruption Act, 1988 which is aimed at curbing corruption among public servants. This Act was added to the schedule of offences in 2009.
- The PMLA now applies with all its rigour to public servants. Thus, a public servant charged with corruption and a hard-core drug trafficker are treated alike.
- A very disturbing thing about the PMLA is that an accused under this law is presumed to be guilty until proved innocent.
Conclusion
- Personal liberty, deprived when bail is refused, is too precious a value of our constitutional system recognised under Article 21 that the curial power to negate it is a great trust exercisable, not casually but judicially, with lively concern for the cost to the individual and the community.
- Therefore the government and judiciary together should take steps to address this issue.
