PMLA | Uncovering New Duties for CA/CS/CMA
- Blog|News|FEMA & Banking|
- 2 Min Read
- By Taxmann
- |
- Last Updated on 19 June, 2023
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Table of Contents
- Brief Contours of PMLA
- Peculiar & Unique Architecture of PMLA
- Reasons why it is creating Jurisprudential Mayhem
- Overview of PMLA Notification-03.05.2023
- Understanding Role & Relevance of CA, CS, CMA
- Way Forward
1. Brief Contours of PMLA
| CONCEPT of | “AUTHORITIES” governing PMLA | ||
| 1 | Scheduled Offence | 1 | Central Govt (CG) |
| 2 | Proceeds of Crime | 2 | Enforcement Directorate (ED) |
| 3 | Money Laundering Offence | 3 | Adjudicating Authority (AA) |
| 4 | Transaction | 4 | Appellate Tribunal (AT) |
| 5 | Intermediary | 5 | Special Courts (SC) |
| 6 | Reporting Entity | ||
| Additional Consequences (qua Scheduled Offence) | |||
| 1. | Money Laundering (CRIMINAL Offence) | ||
| 2. | Property Confiscation (CIVIL Deprivation) | ||
2. Peculiar & Unique Architecture of PMLA
1. Subject to ED’s Benevolence certifying “I have Reasons to believe”.
(a) “EVERYTHING” (Without Territory) on earth & beyond is “Proceeds of Crime” &
(b) “EVERYONE” (Beyond Time) is a “Money Launderer”.
2. “Transcends Time & Territory” (TTT).
3. “Anything” & “Everything” can be“EVIDENCE”.
4. “Anyone” can be FORCED (under threat of Prosecution) to give“Evidence”.
5. Inversion of “PRESUMPTION OF INNOCENCE”.
3. Reasons why it is creating Jurisprudential Mayhem
- “Rules of Interpretation” & “Rules of Construction”.
- Old Judgements/Precedents.
- Old Jurisprudence.
- Legal Education.
- Lack of Research & Development (R&D).
4. Overview of PMLA Notification-03.05.2023
- “Addition” of “Financial Transaction carried out by CA/CS/CWA & its Firms on behalf of Client in the course of Profession in relation to Designated Activities” in definition of “Person carrying on designated Business/Profession” u/2(1)(sa)-PMLA, 2002.
- “Designated Activities” are:
(a) Buying & Selling of any Immovable Property;
(b) Managing of client Money/Securities/Other Assets;
(c) Management of Bank/Savings/Securities Accounts;
(d) Organisation of Contributions for Creation/Operation/Management of Cos;
(e) Creation/Operation/Management of Companies/LLP/Trusts, & Buying & Selling of Business Entities.
5. Understanding Role & Relevance of CA, CS, CMA
1. Freedom to practice Profession u/Part-III (Fundamental Right) of Constitution of India vis avis Statutory Practice (Duties) u/Companies, Income Tax Act etc.
2. Statutory Obligation u/Ch-4 (Obligation of Banking Companies, Financial Institutions & Intermediaries)” of PMLA, 2002 (S.12-15):
a. “Intermediary”, “Person carrying on Designated Business & Profession”, “Reporting Entities”, “Specified Transaction”, “Suspicious Transaction” u/PMLA.
b. “Verifying Clients’ identity”, “Maintenance of Information & Records”, “Furnishing of Information”, “Enhanced Due-Diligence”.
3. Engaging only through Professional Duties without non-Professional Interest.
6. Way Forward
- Removing “Doubts” as an ongoing exercise.
- Getting trained & engaging the “Society” on clarity path
- Understanding the meaning of “Law”.
- Developing “new Jurisprudence” of Mathematical scale.
- Errorless “Assistance” to Institutions (Parliaments, Executives & Courts).
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