Context: SC is hearing a case related to misuse of PMLA.
Prevention of Money Laundering Act (PMLA), 2002:
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PMLA enables the Government or the public authority to confiscate the property earned from the illegally gained proceeds.
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Objectives:
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To prevent money-laundering.
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To provide for confiscation of property in money-laundering.
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To punish those who commit the offense of money laundering.
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Read more basics from Prelims Notes.
Issues with the Prevention of Money Laundering Act:
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The Directorate of Enforcement(ED) is empowered to issue summons, record statements, make arrests, and search and seize property.
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PMLA is pulled into the investigation of even “ordinary” crimes.
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Despite having powers of investigation, the ED has not been classified as a ‘police agency’.
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The Act takes away the presumption of innocence usually afforded to accused persons under criminal law.
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To be granted bail, the accused must prove prima facie that they were not guilty, and satisfy the Court that they will not commit any further offense.
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The offenses mentioned in the Act are extremely overbroad, and in several cases, have absolutely no relation to either narcotics or organized crime.
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Besides, there is a lack of clarity about the ED’s selection of cases to investigate.