Money Laundering Legislation - How to deal with fugitives?
Published: Apr 28, 2017
By Somesh Arora
Since, Prevention of Money Laundering Act, 2002 is outcome of elaborate international deliberations, which were adopted as a Political Declaration and Global Programme of Action against terrorist funding and money laundering worldwide, it is to be expected that the same shall be having elaborate provisions embedded in it, for international cooperation. The Financial Action Task Force (FATF) established in 1989 on an ongoing basis monitors the progress of various issues and points out where international cooperation is required. Not only are the recommendations of FATF contained in as provisions in most of the local legislations of the Member States, but at regular meetings , are also taken up as points of interaction between representatives of the Member States. The States are allowed to become Members only if stipulated number of recommendations of FATF,are complied with by that State to curb organized crime through banking or other channels of money laundering.The provisions relating to reciprocal arrangement for assistance that the Member Nations to the FAT Fare required to provide, as far as our Indian law is concerned are contained, in Chapter IX of the Prevention of Money Laundering Act, 2002.
In this regard, Sections 55 to 61 lays down the obligations of Contracting States on mutual basis and enforcement of the provisions of Prevention of Money Laundering Act, 2002 can be done by any Contracting Party even in a domain outside India also, if there exists an agreement.
Provisions under PMLA,2002 deal with principle of mutuality and requires Courts in India also to provide same level of co-operation to the other contracting party. In this regard under Section 57 an application by Investigating Officer is required to be made to Special Court under Prevention of Money Laundering Act relating to the fact that any evidence required in connection with an investigation in India is likely to be available in any place in the Contracting State. On the basis of such application , the Special Court can make a request to a Court or an authority in a Contracting State to examine facts and circumstances of the case and to take such steps as a Special Court may specify including forwarding of any evidence that they have been collected in that Contracting State. Under Section 58D, Contracting State can also be requested to confiscate any property once the Special Court passes appropriate orders and transmits it to the Central Government for making suitable request. Section 59 contains Provisions relating to Summons, issue of Warrant, Summons to any person requiring him to attend and produce the documents or even a Search Warrant can be issued to be executed at any place in Contracting State through designated authorities. When a person is transferred to India pursuance to his arrest etc. the Special Court in India is required to ensure that the conditions subject to which the prisoners is transferred to India are complied with. Section 60 empowers Special Court through Central Government Authorities to cause attachment, seizure and confiscation etc. of property of a Money Laundering Offender in a contracting State. It is thus clear that the provisions of Prevention of Money Laundering Act, 2002 are much more stringent than the normal extradition provision which require a treaty between the contracting states and is normally agreed to only if the offence is a criminal offence in the domain of both the countries and only after the Court in the country from where the offender is to be extradited, is satisfied that prima-facie an offence is made out. This makes it a time consuming exercise, whereas under Section 59 to cause a summon or a warrant to be responded to , only presence of accused in the Contracting State is required to be shown. Therefore, while the agency seeking trial of a predicate offence, for which PMLA proceedings are eventually initiated, can apply for extradition of a fugitive which is a time consuming exercise. The authorities under PMLA can take resort to Provisions of Section 59 in case even if a summon is not responded to during investigation stage. This makes the task of the Investigating Officers much more easier and chances of getting a fugitive back from the land of a contracting member, that much simpler.
In the context of Vijay Mallya matter, while his lawyers have been taking a defence that he was a loan defaulter and had not committed any fraud and that his repayment capacity had dwindled due to business losses, the PMLA Authorities have taken the ground that he had committed predicate offence of fraud, criminal conspiracy etc. and had parked funds obtained from loans , abroad, with a view to cheating Banks through deliberate default. Therefore, it initiated proceedings under Prevention of Money Laundering Act, 2002 and wanted Vijay Mallya to respond to enable it to perform its investigations. At this stage alone, the matter through the intervention of the Special Money Laundering Court was taken up with the British Authority, with whom India has a Mutual Legal Assistance Treaty (MLAT) for prevention of Money Laundering. A non-bailable warrant in this regard after obtaining the same from Special Court was sent through Central Government with the requisite Letter of Request. Thereafter , the British Designated Authorities conducted the necessary proceedings as per the terms of MLAT and arrested and then bailed Shri Vijay Mallya, subject to conditions. Obviously this may not mean an end to the troubles of Shri Vijay Mallya and even though his extradition under India U. K. Treaty may not come through easily but the provisions of Section 59 and reciprocal arrangements under MLAT with U. K., if pursued to their logical conclusions may require them to take the desired action of Special Court of production of Shri Vijay Mallya before them. Overall, it will be a first real test as to how far the provisions of mutual cooperation and reciprocal arrangements under Prevention of Money Laundering Legislation can actually work. The reports in the Press in the meanwhile counting the numbers of fugitives which were expedited from U.K. may not be of much relevance in view of changed legal scenario.
(Former Commissioner of Customs and Excise, Advocate (Money Laundering)
