The Prevention of Money Laundering Act (PMLA): A Stringent Law with a Low Conviction Rate
UPSC Relevance
Prelims: Indian Economy (Money Laundering, Enforcement Directorate - ED, Financial Action Task Force - FATF, Double Taxation Avoidance Agreement - DTAA), Indian Polity and Governance (PMLA, Supreme Court judgments).
Mains:
GS Paper 3: Money-laundering and its prevention; Security challenges and their management in border areas; Linkages of organised crime with terrorism.
GS Paper 2: Statutory, regulatory and various quasi-judicial bodies (ED); Government policies and interventions.
GS Paper 4 (Ethics): Ethical concerns and dilemmas in government institutions (misuse of power).
Key Highlights from the News
Since 2015, the Enforcement Directorate (ED) has registered 5,892 cases under the Prevention of Money Laundering Act (PMLA), but only 15 cases have resulted in convictions.
This low conviction rate raises questions about the efficiency of law enforcement.
Money laundering is the process of disguising the origin of illegally obtained money to make it appear legitimate. It primarily involves three stages: placement, layering, and integration.
PMLA is a stringent law where the burden of proof lies with the accused to prove their innocence.
There are widespread allegations of misuse by authority, where the law is used for political objectives.
Money laundering is a serious crime as it is a major source of terror financing.
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