SC reproduces Sinha, PC speeches on PMLA as FMs

The Supreme Court reproduced excerpts of Parliament speeches of Yashwant Sinha and P Chidambaram as finances ministers on the Prevention of Money Laundering Act in its Wednesday verdict while disposing of petitions challenging the Act, one of which, significantly, was filed by Karti Chidambaram.

The two FMs favoured stringent measures in PMLA, arguing that money laundering posed a serious threat to the integrity and sovereignty of the country while contending that amendments to the Act were evolutionary.

Sinha in his speech in December 1999 “set the tone for the years to come in the fight against money laundering”, SC said. It also said P Chidambaram, in his speech in the Rajya Sabha in December 2012, explained the need for amendment(s) to the Act. His son Karti Chidambaram had challenged the constitutional validity of several provisions of the Act, which SC upheld on Wednesday. Chidambaram and his son face CBI and ED probes for alleged ‘money laundering’.

“Money-laundering, that is the cleansing of proceeds of crimes such as extortion, treason, drug trafficking, gun running etc., poses a serious threat to the integrity and sovereignty of a country and also to its financial systems. This threat to the nation and its economy has been recognised the world over,” Sinha said in his House speech as FM in 1999. “The point I am making is that we have picked up certain offences which are heinous, as I said in the beginning, which are of very serious nature. We are bringing this legislation on money laundering so that receipts from those crimes and properties acquired as a result thereof, are dealt with under this Act.”

Chidambaram in a speech in the Rajya Sabha as FM in December 2012 said money laundering is a very ‘technically defined’ offence. “It is not the way we understand money laundering in a colloquial sense. It is a technically-defined offence… It is more than simply converting black money into white or white money into black. Initially, the thinking was unless a person was convicted of the predicate offence, you cannot convict him of money laundering. But that thinking is evolved now. The Financial Action Task Force has now come around to the view that if the predicate offence has thrown up certain proceeds and you dealt with those proceeds, you could be found guilty of offence of money laundering. What we are trying to do is to bring this law on lines of laws that are commended by FATF and all countries have obliged to bring their laws on the same lines… All I am trying to say is that this is an evolutionary process,” he had said.

SC also referred to a speech delivered by finance minister Nirmala Sitharaman in her debate on Finance Bill, 2019, where she explained that it would be wrong to say that the offence of money laundering is, “a one-time instantaneous offence”.

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William Murphy

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