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Detailed Breakdown of Scheduled Offences under PMLA

Raghvendra Sonker

| Updated: Aug 13, 2022 | Category: PMLA

Scheduled Offences under PMLA

Concealment of wealth, whether earned legally or illegally, is not new. To curb this practice of money laundering, the central government has brought special legislation like the Prevention of Money Laundering Act (PMLA, 2002)[1] to plug the gaps used to evade the payment of taxes and compliances with other consistent laws.

What are Proceeds of Crime?

Before coming to the topic of scheduled offences, we must learn and understand the definition of money laundering and proceeds of crime. Section 3 of the Prevention of Money Laundering Act, 2002 elucidates on Offence of Money Laundering states that a person directly or indirectly involved, attempts, or knowingly assists and is a party to any such activity which deals with proceeds of crime. The acquisition, concealment, possession or use of proceeds of crime falls under the definition of money laundering. It also includes a person who claims and even presents it as untainted property shall be guilty of money laundering offence.

Section 2 (1)(u) of the PMLA defines the proceeds of crime it means the property which has been obtained or derived either directly or indirectly through a commission of scheduled offences under PMLA. Proceeds of crimes must have nexus with the scheduled offences under PMLA.

What are Scheduled Offences?

The scheduled offences arecovered and specified under the schedule of the PMLA. The provisions of the PMLA can’t be invoked unless a scheduled offence under PMLA has been committed.Thescheduled offences are set out as the offencescommitted against the state. These are also known as Predicate Offences, as the scheduled offence is a prerequisite to initiating the proceeding of money laundering under the Act.

The offences covered in the Schedule of the PMLA, 2002 are termed as Scheduled Offences with respect to Section 2(1)(y) of the Prevention of Money Laundering Act. The listed schedule offences are divided into Part A, Part B, and Part C.

Part A of the Schedule provides a description of the offences listed under various Acts, which requires no monetary limit to initiate a proceeding under the PMLA. Part B of the Schedule covers offences having a value of more than Rs. 1 crore or more, and Part C deals with offences involving cross-border implications.

Scheduled Offences under PMLA

The Parts mentioned above of the schedule are further explained in detail to understand the Scheduled offences under PMLA better. The following legislations and listed offences are:

The statutes and offences specified under Part A of the Schedule:

Paragraph 1- Offences under Indian Penal Code (IPC), 1860;

Paragraph 2-Narcotic Drugs and Psychotropic Substances Act, 1985;

Paragraph 3-Explosives Substances Act, 1908;

Paragraph 4- Unlawful Activities (Prevention) Act (UAPA), 1967;

Paragraph 5-Arms Act, 1959;

Paragraph 6- Wildlife Protection Act, 1972;

Paragraph 7-Immoral Traffic (Prevention) Act, 1956;

Paragraph 8- Prevention of Corruption Act, 1988;

Paragraph 9- The Explosives Act, 1884;

Paragraph 10-The Antiquates and Arts Treasures Act, 1972;

Paragraph 11-Securities and Exchange Board of India, 1992;

Paragraph 12-Customs Act, 1962;

Paragraph 13- The Bonded labour System (Abolition) Act, 1976;

Paragraph 14- Child Labour (Prohibition and Regulation) Act, 1986;

Paragraph 15- Transplantation of Human Organ Act, 1994;

Paragraph 16- Juvenile Justice (Care and Protection of Children) Act, 2000;

Paragraph 17- Emigration Act, 1983;

Paragraph 18- The Passport Act, 1967;

Paragraph 19- The Foreigners Act, 1946;

Paragraph 20- The Copyright Act, 1957;

Paragraph 21- The Trade Marks Act, 1999;

Paragraph 22-Information Technology Act (IT Act), 2000;

Paragraph 23- The Biological Diversity Act, 2002;

Paragraph 24- Protection of Plants Varieties and Farmers Rights Act, 2001;

Paragraph 25- The Environment Protection Act, 1986;

Paragraph 26- Water (Prevention and Control of Pollution) Act, 1974;

Paragraph 27- Air (Prevention and Control of Pollution) Act, 1981;

Paragraph 28- The Suppression of Unlawful Acts against Safety of Maritime Navigation and Fixed Platforms of Continental Shelf Act, 2002;

Paragraph 29- The Companies Act, 2013.

The statutes and offences specified under Part B of the Schedule:

  • The Customs Act, 1962

The offence of representing false documents, false declaration, etc., is described under the Part B of the Scheduled Offences under PMLA.

The offence specified under Part C of the Schedule:

This part of the schedule deals with trans-border crimes and is vital in global curbing of money laundering crimes.

Any scheduled offence that has been committed in India and proceeds of the crimes, thereof transferred or attempt has been made to place outside the territory of India.

Investigation of Scheduled offences under PMLA

Enforcement Directorate (ED) enjoys a wide range of administrative and implementing powers with respect to scheduled offences under PMLA. Section 48 and 49 of the Prevention of Money Laundering Act, 2002, provide the Enforcement Directorate’s officers empowered to investigate money laundering and terror financing cases. When the ED is of the view that any process of activity involved with proceeds of crime or committed offence is in the list of scheduled offences under PMLA, then it gets the power to investigate the matter further. 

Other agencies that are entrusted with investigating the offences under PMLA are State Police, Customs, SEBI, RIU, CBI, and NCB under their respective legislations.

Conclusion

Money Laundering is a continuous offence, it continues till any person enjoys the time proceeds of crime, and they shall be guilty of the offence of money laundering. The scheduled offences under PMLA cover no. of offences of various legislations which are severe and create instability in the society if not tackled directly. If any person commits scheduled offences under PMLA, then only they will be charged under section 3 of the PMLA.The data significantly highlights that there is a need to streamline the applicability of PMLA consultant and ensures more focus on serious offences.The government should regularly remove the non-serious offences that may dilute the true objective of the PMLA.

Read our Article: Tracing the Developments in the Prevention of Money Laundering Act, 2002

Raghvendra Sonker

Raghvendra Sonker has completed his Graduation from Gujarat National Law University. He has a keen interest in legal drafting, writing articles, and research papers. His core interest areas are Banking and Financial Issues.

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