RIGHTS OF THE ACCUSED - POLITY

RIGHTS OF THE ACCUSED - POLITY

News: The Supreme Court has enhanced the protection of the rights of accused under Prevention Of Money Laundering Act, (PMLA).

 

What’s in the news?

  • The Prevention of Money Laundering Act (PMLA) was introduced in 2002 to curb money laundering.
  • PMLA empowered the Enforcement Directorate (ED) to probe money laundering charges and arrest suspects.
  • Recently, the Supreme Court has scrutinized the powers of ED.

 

Key Highlights of the Supreme Court Ruling on Rights of Accused under PMLA

  • The Supreme Court highlighted that under Article 22 of the Indian Constitution, an accused has a fundamental right to be informed of the reasons for arrest.
  • Previously, the ED was only required to inform the accused orally, but the Court ruled that written grounds must be provided without exception.
      • This assures that the arrest was lawful and transparent.
      • This prevents arbitrary arrests and guarantees that the accused understand and challenge their detention.
  • The Court upheld the strict bail conditions under the PMLA while recognising the right to bail under Section 436A of the Code of Criminal Procedure (CrPC).
      • The provision requires that a person detained for half the maximum time of imprisonment shall be released on bail.
  • The Court established that the reasons for arrest must have a high level of proof and be appropriate.
  • The Court emphasized that the exception in Section 45, which allows for bail to women if directed by the Special Court, should be applied fairly.
  • The Court upheld that confessions obtained by force or practices that violate the right to self-incrimination cannot be accepted as evidence.

Prevention of Money Laundering Act (PMLA)

  • It was established to prevent and control money laundering in India.
      • Money laundering is the process of presenting illegally obtained funds as legitimate while hiding their criminal origins.
      • This act establishes a legal basis for seizing and confiscating property resulting from such illegal activity.
  • The act was designed to ensure compliance with several global conventions and recommendations, including:
  • The Vienna Convention (1988) on combating drug trafficking and related money laundering activities.
  • The Financial Action Task Force (FATF) Recommendations (1990) to set international standards for anti-money laundering measures.
  • United Nations Resolutions (1990) to tackle the drug problem and related financial crimes.

 

Key Highlights of the PMLA Act

  • The Enforcement Directorate (ED) is responsible for enforcing the PMLA.

§  It has wide authority, such as issuing arrest warrants, executing raids, and making arrests.

  • The Act states that anyone found guilty of money laundering will be imprisoned for three to seven years; however, the maximum punishment may be extended to ten years instead of seven.
  • The Director or an officer above the Deputy Director may attach property believed to be "proceeds of crime" for 180 days.
  • The Adjudicating Authority, assigned by the central government, resolves disputes involving money laundering matters.
  • Under the PMLA, if someone is accused of money laundering, they have to prove that their assets are illegal. This transfers the burden of proof to the accused.
  • The Appellate Tribunal hears appeals against Adjudicating Authority judgements.

 

Concerns with the PMLA

  • The enormous authority granted to the ED raises questions about accountability and transparency.
  • The law imposes responsibility on the accused to prove their innocence. This can make it difficult to secure bail and result in lengthy judicial proceedings.
  • Despite the strict procedures, the PMLA has a relatively low conviction rate.
      • Many people involved in money laundering suffer lengthy trials and asset seizures, even if they are not convicted.
      • In the last ten years, the Enforcement Directorate has filed 5,297 money laundering charges, with only 43 trials completed.
  • While the PMLA allows for the attachment of properties linked to money laundering, its practical implementation can be harsh.
      • It might make it difficult for people to keep their dignity and continue running their businesses or earning a living.
  • The ED lacks the technical skills and advanced training needed to keep up with complex money laundering strategies like digital currency and offshore accounts.
  • Money laundering is a transnational crime that involves multiple nations, and the ED faces challenges in obtaining timely and accurate information from foreign stakeholders due to bureaucratic barriers and legal challenges.