Economic Crimes and Enforcement Directorate

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Money laundering is an illegal process of creating the mask for large amounts of dirty money obtained from criminal sourcesThe PMLA 2002 and rules notified thereunder impose an obligation on banking companies, financial institutions and intermediaries to verify the identity of clients, maintain records and furnish information to FIU-IND. PMLA 2002 defines money laundering offence and provides for the freezing, seizure and confiscation of the proceeds of crime.

  • FERA has been repealed by FEMA. FEMA was enacted to consolidate and amend the law relating to foreign exchange with the objective of facilitating the external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India.

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  1. Foreign Exchange Management Act, 1999 

An Act to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India.

  • Section 10 provides for the complete procedure for authorisation of any person to deal in foreign exchange. Section 13 provides for fiscal penalty to the extent of thrice the sum involved in such contravention where such amount is quantifiable or upto two lac rupees where the amount is not quantifiable and where such contravention is a continuing one, further penalty which may extend to Rs 5000/-for every day after the first day during which the contravention continues. On failure of a person to make full payment of the penalty imposed on him, Section 14 is an enforcement provision. If a person remains in default in discharge of the penalty awarded to him, he is liable to civil imprisonment.However, insofar as conservation and/or augmentation of foreign exchange is concerned, the restrictions in FEMA continue to be as rigorous as they were in FERA.
  • For violation of foreign exchange regulations, the penalty can be levied and its non- compliance results in the civil imprisonment of the defaulter. The whole intent and idea behind COFEPOSA is to prevent violation of foreign exchange regulations or smuggling activities which have a serious and deleterious effect on the national economy. Therefore, the relevance of provision for preventative detention of the anti-social elements indulging in smuggling and violation and manipulation of foreign exchange in COFEPOSA continues even after repeal of FERA.

 FOREIGN EXCHANGE MANAGEMENT ACT NOTIFICATION by Reserve Bank Of India

2. Prevention of Money Laundering Act,2002

An Act to prevent money-laundering and to provide for confiscation of property derived from, or involved in, money-laundering and for matters connected therewith or incidental thereto

3. Smugglers and Foreign Exchange Manipulators Act. 1976

An Act to provide for the forfeiture of illegally acquired properties of smugglers and foreign exchange manipulators and for matters connected therewith or incidental thereto.Findings under other laws not conclusive for proceedings under this Act. No finding of any officer or authority under any other law shall be conclusive for the purpose of any proceedings under this Act.

4. NDPS ACT 1985 (relevant provisions)

  1. The provisions of this Chapter( Under the Act) shall apply only to persons specified in sub-section (2)
  2. The persons referred to in sub-section (1) are the following, namely :-
    a. every person who has been convicted of an offence punishable under this Act with imprisonment for a term of 2[ten] years or more;
    b. every person who has been convicted of a similar offence by competent court of criminal jurisdiction outside India;
    c. every person in respect of whom an order of detention has been made under the Prevention of Illicit Traffic in Narcotic Drugs and Psychotropic Substances Act, 1988 (46 of 1988), or under the Jammu and Kashmir Prevention of Illicit Traffic in Narcotic Drugs and Psychotropic Substances Act, 1988 (J & K Act XXIII of 1988
Management of Properties
Documents
Vehicles
Land and Building

5. Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974  (COFEPOSA)

Under this act orders to detain (including foreigners), by central government, state government, joint secretary of central government and secretary of state government, in case of-

Smuggling
Abetting smuggling
Transport, concealing, storing
Harbouring persons involved in smuggling
Dealing in smuggled goods

  • It empowers the competent authority to make an order of detention against any person ‘with a view to preventing him from acting in any manner prejudicial to the conservation or augmentation of foreign exchange.If the activity of any person was prejudicial to the conservation or augmentation of foreign exchange, the authorities were empowered to make a detention order against such person.
  • There are three other Central Preventive Acts apart from COFEPOSA, namely, (a)  National Security Act, 1980, (b) Prevention of Blackmarketing and Maintenance of Supplies of Essential Commodities Act, 1980 and (c) Prevention of Illicit Traffic in Narcotic Drugs and Psychotropic Act, 1974.

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Enforcement Directorate 

Financial Intelligence UnitIndia (FIU-IND) was set by the Government of India vide O.M. dated 18th November 2004 as the central national agency responsible for receiving, processing, analyzing and disseminating information relating to suspect financial transactions. FIU-IND is also responsible for coordinating and strengthening efforts of national and international intelligence, investigation and enforcement agencies in pursuing the global efforts against money laundering and related crimes. FIU-IND is an independent body reporting directly to the Economic Intelligence Council (EIC) headed by the Finance Minister.

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Competent Authority

The competent authority may, after considering the explanation, if any, to the show- cause notice issued under section 6, and the materials available before it and after giving to the person affected (and in a case where the person affected holds any property specified in the notice through any other person, to such other person also) a reasonable opportunity of being heard, by order, record a finding whether all or any of the properties in question are illegally acquired properties. The burden of proof. In any proceedings under this Act, the burden of proving that any property specified in the notice served under section 6 is not illegally acquired property shall be on the person affected

Appellate Tribunal

The Present Appellate Tribunal under SAFEMA Act is constituted by the merger of ATFP and AT PMLA to hear the appeals filed against the orders of Competent Authority under SAFEMA/NDPS Acts and against the order of Adjudicating Authority under PMLA Act.The Chairman of the Appellate Tribunal shall be a person who is or has been or is qualified to be a Judge of the Supreme Court or of a High Court. Any person aggrieved by an order of the competent authority made under section 7, sub-section (1) of section 9 or section 10, may, within forty-five days from the date on which the order is served on him, prefer an appeal to the Appellate Tribunal.Competent authority and Appellate Tribunal to have powers of the civil court. No order passed or declaration made under this Act shall be appealable except as provided therein and no civil court shall have jurisdiction in respect of any matter which the Appellate Tribunal or any competent authority is empowered by or under this Act to determine and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act.

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The law of Preventive Detention, see  by clicking here

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