Progress of Criminalisation - AML/CFT- India

By

 The PMLA, enacted in 2002, was implemented on July 1, 2005. The number of cases recorded under the PMLA in 2020-21 was 981, during 2021-22, it rose to 1,180 and there were 949 cases during 2022-23.  Overall, till 31 March 2022, the ED recorded 5,422 cases under the PMLA, attached proceeds of crime of Rs. 1,04,702 crore (approximately), and filed prosecution complaints (charge sheets) in 992 cases resulting in the confiscation of Rs 869.31 crore and conviction of 23 accused. 

FEMA was enacted in 1999 after repealing the Foreign Exchange Regulation Act (FERA) of 1973. Till March 31, 2002, the agency took up 30,716cases for investigation under FEMA and issued 8,109 show cause notices (after completion of the investigation). As many as 6,472 show cause notices were adjudicated under the FEMA, thereby imposing a penalty of around Rs 8,130 crore and assets of Rs 7,080 crore (approximately) were seized under FEMA.


    Cases Registered under PMLA 2002 & FEMA 1999 @ India

Year

PMLA 2002

FEMA 1999

2012-13

221

1722

2013-14

209

1041

2014-15

178

915

2015-16

111

1516

2016-17

200

1993

2017-18

148

3627

2018-19

195

2659

2019-20

562

3360

2020-21

981

2747

2021-22

1180

5313

2022-23

941

4173

It is evident from the data as captured above that very small number of cases are being taken up for investigation under the PMLA as compared to annual registration of the cases under the Money Laundering Act in UK (7,900), USA (1,532), China (4,691), Austria (1,036), Hongkong (1,823), Belguim (1,862), Russia (2,764).

It is pertinent to mention here that during last five year (2016-17 to 2020-21), 2086 cases were taken up for investigation under the PMLA out of registration of FIR of approx. 33 lakh for predicate offence by Law Enforcement Agencies. 

The ED has recorded cases on the basis of a "risk-based robust mechanism" under the provisions of the Prevention of Money Laundering Act, 2002 (PMLA) and the Foreign Exchange Management Act, 1999 (FEMA)

The total money laundering cases registered in these three years stand at 3,110. Similarly, the federal agency booked 2,747 cases under the FEMA during 2020-21; 5,313 during 2021-22; and 4,173 cases in 2022-23. So a total of 12,233 FEMA cases were registered by the ED in the last three years.

Further, proceeds of crime amounting to Rs 2,214.92 crore have been confirmed by the Adjudicating Authority (of the PMLA) during the last three years.

A total of 1,004 cases have been registered under the FEMA over the last three years in Rajasthan and 102 show cause notices have been issued and 106 Adjudication orders have been passed in the state.

The low registration of cases in India is due to the robust mechanism for risk-based selection of the cases for investigation. It is pertinent to mention here that FATF recommendation provides for no threshold for selection of cases for investigation under the PMLA, however, the Directorate of Enforcement is focusing its attention on cases involving high value of proceeds of crime and cases involving serious predicate offence involving terror financing, narcotics, corruption, offence involving national security, etc


Happy Reading,


Those who read this, also read:


1. Money Laundering & Evoluition of AML


Formerly Faculty for Finance & Associate Dean, IBS-Kochi MBA (Banking & Finance – CUSAT);CFA. Accredited Management Teacher from CME of AIMA, Delhi has been in Management Education from 1988. Exposure is in the field of Mutual Funds, Market Research, Project Report preparation & evaluation, Advertising & NGO Activities. This Chief Manager, UTI Asset Management Co Pvt. Ltd(1992-2003), Mumbai. Undergone training in Case Study method of teaching under Mr. Trevor Williams and Mr. Scott M Andrews conducted by the ECCH, UK . Published Books & Book Review, Series of academic articles and maintains a column on MFs under "Fund scan" in Business Manorama since January 2007,Contributes "Portfolio Doctor" column for 'Sampadyam' a wealth mgt publication in Malayalam from manorama group since February 2007, Listed her case studies at asiacase.com.Presented papers in national & international conferences on Mutual Funds. Faculty Member @ ASIET, Kalady from 2010 to June 2019. Dean @ SNGIST, N Paravur, Ernakulam from Sep 2019 -Jan 2021, I continue my efforts to spread the knowledge in area of Finance and contribute to Management Education

Comments

Post a Comment

Popular posts from this blog

National Risk Assessment (NRA): India

By
  India's National Risk Assessment (NRA) is  an ongoing exercise to identify sectors that are vulnerable to money laundering and terrorist financing (ML/TF) .  The NRA is based on recommendations from the Financial Action Task Force (FATF) and helps inform policy-making, resource allocation, and the implementation of effective AML/CFT measures. The NRA also ensures that national strategies address both domestic and international threats. The NRA provides a foundation for informed policy-making, resource allocation, and the implementation of effective AML/CFT measures . It ensures that national strategies are aligned with the specific risk landscape of the country and that they address both domestic and international threats. The subject matter of NRA  was discussed in the Anti-Money Laundering Steering Committee (AMLSC) set up with the approval of Finance Minister, and it was decided to conduct the NRA following the World Bank methodology. The Methodology requi...
Read more

Customer Due Diligence(CDD) : Individuals

By
Image
This post is based on RBI Master Circular dated Feb 25, 2016 updated on Jan 04, 2024  Part I - Customer Due Diligence (CDD) Procedure in case of Individuals For undertaking CDD, REs shall obtain the following from an individual while establishing an account-based relationship or while dealing with the individual who is a beneficial owner, authorised signatory or the power of attorney holder related to any legal entity: (a)     the Aadhaar number where,   (i) He is desirous of receiving any benefit or subsidy under any scheme notified under section 7 of the Aadhaar (Targeted Delivery of Financial and Other subsidies, Benefits and Services) Act, 2016 (18 of 2016); or (ii) He decides to submit his Aadhaar number voluntarily to a bank or any RE notified under first proviso to sub-section (1) of section 11A of the PML Act; or (aa) the proof of possession of Aadhaar number where offline verification can be carried out; or (ab) the proof of possession of Aa...
Read more

Periodic Updation of Customer Risk Profile

By
1. Preparation of Customer Profile from KYC Data In the initial years of KYC, RBI has been following a handholding approach as can be seen from their circular dated July 2009 and that of Feb 25, 2016 as updated on Jan 04, 2024. RBI requires REs to conduct risk profiling and risk categorization and periodic updation.  Extracts from RBI MD dated July 01, 2009 under Customer Acceptance Policy a)ii) Parameters of risk perception are clearly defined in terms of the nature of business activity , location of customer  and his clients, mode of payments, volume of turnover, social and financial status etc. to enable categorisation of customers into low, medium and high risk (banks may choose any suitable nomenclature viz. level I, level II and level III). Customers requiring very high level of monitoring, e.g. Politically Exposed Persons (PEPs) may, if considered necessary, be categorised even higher; b). Banks should prepare a profile for each new customer based on risk categorisatio...
Read more