Prevention Laundering Of Money - Inclusion Of CAS, CS And CWA

The laws governing the prevention of money laundering finally came into existence globally pursuant to the political declaration adopted by the Special Session of the United Nations General Assembly held in June 1998.

In the said session, member states were called on to adopt national money laundering legislation and program. It was noticed globally that money laundering posed not merely a serious threat to the financial systems of countries but also affected the integrity and sovereignty of those countries.

In order to obviate the threat of money laundering, some of the steps taken by the international community included the following:

• Declaring that the laundering of monies carried out through serious crimes is a criminal offence;
• Working out the modalities of disclosure by financial institutions regarding reportable transactions;
• Declaring money laundering to be an extraditable offence;
• Confiscation of the proceeds of a crime; and
• Promoting international cooperation in the investigation of offences relating to money laundering

From an Indian perspective, the Prevention of Money Laundering Act, 2002 (hereinafter referred to as "the Act" or "the PMLA Act") was introduced to prevent money laundering. The Act was introduced with the noble objective of preventing money laundering and providing for the confiscation of property derived from, or involved in, money laundering and for matters connected therewith or incidental thereto. Judicially, courts have recognised "economic offences" as a separate class unto themselves. In a landmark judgement, the Hon’ble Supreme Court in Mohanlal Jitmalji Porwal (1987) 2 SCC 364 compared an "economic offence" with "murder" and thereafter held as follows: