PMLA

A money laundering investigation under the Prevention of Money Laundering Act proceeds differently from an ordinary criminal investigation. It runs alongside a predicate offence, involves a separate set of authorities, and can result in the attachment of property before any conviction is recorded.

Investigation and attachment

The Enforcement Directorate investigates suspected money laundering by issuing summons, conducting searches, and recording statements under its own procedural powers. Where it forms the view that property is proceeds of crime, it can provisionally attach that property, subject to confirmation by the Adjudicating Authority constituted under the Act. Contesting an attachment involves demonstrating either that the property is not connected to the alleged proceeds of crime or that the underlying predicate offence does not sustain the attachment.

The predicate offence link

A money laundering proceeding under the Act is not free-standing. It depends on an underlying scheduled offence, typically prosecuted separately, whether under general criminal law or a specific economic or regulatory statute. Advising on a PMLA matter therefore involves tracking both proceedings together, since developments in the predicate offence case can materially affect the money laundering proceeding and vice versa.

Reporting entities

Banks, financial institutions and other entities designated as reporting entities under the Act carry independent obligations to maintain records, verify client identity and report specified transactions to the Financial Intelligence Unit. Advisory to such entities addresses how these obligations are built into internal processes, separately from any defence work arising once an investigation has actually begun.

Bail and appeal

Bail in PMLA matters is governed by conditions specific to the Act that are more restrictive than the ordinary bail provisions, and applications proceed before the Special Court and, on appeal, the High Courts. What a person or entity under investigation has to decide, early, is how the PMLA proceeding, the predicate offence and any parallel regulatory action are being coordinated, since treating them as separate matters handled independently tends to produce inconsistent positions across the three.