Black Money – Domestic and International Efforts

Govt proposes key amendments to PMLA


Mains Paper 2: Governance | Government policies & interventions for development in various sectors & issues arising out of their design & implementation

From UPSC perspective, the following things are important:

Prelims level: PMLA, Finance Bill

Mains level: Measures to combat black money

Proposal to set up special courts

  1. The Central government has proposed changes to various provisions of the Prevention of Money Laundering Act (PMLA) through the Finance Bill
  2. A proposed crucial amendment empowers the Special Court to restore confiscated assets to the rightful claimants even during the trial
  3. Earlier, the assets could be restored only after completion of the trial

Sharing of details mandatory

  1. The government has introduced a new Sub-Section (2) of Section 66, making it mandatory for the ED to share relevant details with other agencies
  2. PMLA proceedings will be de-linked from those with scheduled offences pursued by other agencies
  3. There will be uniform applicability of bail conditions, instead of only those crimes listed in its schedule
  4. A limit of ₹1 crore in the alleged offence would allow the court to apply bail provisions more leniently to less serious PMLA cases

Why lenient bail conditions?

  1. The proposal comes after the Supreme Court recently struck down the previous provision
  2. The previous provision could deny bail even when there were sound grounds to believe that a person was not involved in money laundering

ED can take up cases outside country also

  1. A change is proposed change in the definition of “proceeds of crime”
  2. It now also allows the ED to proceed against assets of equivalent value located even outside the country


Prevention of Money Laundering Act (PMLA)

  1. Prevention of Money Laundering Act, 2002 is an Act of the Parliament of India to prevent money-laundering and to provide for confiscation of property derived from money-laundering
  2. The Act and Rules notified thereunder impose obligation on banking companies, financial institutions and intermediaries to verify identity of clients, maintain records and furnish information in prescribed form to Financial Intelligence Unit – India (FIU-IND)
  3. The PMLA seeks to combat money laundering in India and has three main objectives:-To prevent and control money laundering

    -To confiscate and seize the property obtained from the laundered money; and

    -To deal with any other issue connected with money laundering in India

Finance Bill

  1. A Finance Bill is a Money Bill as defined in Article 110 of the Constitution
  2. The proposals of the government for levy of new taxes, modification of the existing tax structure or continuance of the existing tax structure beyond the period approved by Parliament are submitted to Parliament through this bill
  3. The Finance Bill can be introduced only in Lok Sabha
  4. The Rajya Sabha can recommend amendments to the Bill
  5. The bill has to be passed by the Parliament within 75 days of its introduction
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