A GUIDE FOR FINANCIAL FRAUD INVESTIGATION & PRECAUTION, SHIVANI SHARMA [read my book txt] 📗

to obtain evidence required in connection with investigation into an offence or proceedings under the Act if such evidence may be available in any place in a contracting State?

     An application is to be made to a Special Court by the Investigating Officer or any officer superior in rank to the Investigating Officer and the Special Court, on being satisfied, may issue a Letter of Request to a court or an authority in the contracting State competent to deal with such request to—

(i) examine facts and circumstances of the case, (ii) take such steps as the Special Court may specify in such letter of request, and

(iii) forward all the evidence so taken or collected to the Special Court issuing such letter of request. 31 Every statement recorded or document or thing received from a Contracting State shall be deemed to be the evidence collected during the course of investigation [Section 57].

 

50)What is the mechanism to provide assistance to a Contracting State?

                 Where a Letter of Request is received by the Central Government from a court or authority in a contracting State requesting for investigation into an offence or proceedings under PMLA, 2002 and forwarding to such court or authority any evidence connected therewith, the Central Government may forward such Letter of Request to the Special Court or to any authority under the Act for execution of such request [Section 58].

 

 51). Whether the properties involved in money laundering located in India can be confiscated, where the offence of money laundering has been committed outside India?

                    The properties involved in money laundering located in India, where the offence of money laundering has been committed outside India, can be ordered to be confiscated by the Special Court/Adjudicating Authority on an application moved to the Special Court/ Adjudicating Authority [Section 58B & 62A].

 

52)What are the reciprocal arrangements for processes and assistance for transfer of accused persons?

    (1) A Special Court, in relation to an offence punishable under section 4 for the service or execution of a summons, a warrant or a search warrant in a Contracting State shall send such summons or warrant, in duplicate, in prescribed 32 form to the Court, Judge or Magistrate through specified Authorities.

     (2) Similarly, a summons, a warrant or a search warrant in relation to an offence punishable under section 4, received for service or execution from a Contracting State, shall be served or executed as if it were a summons or warrant received by it from another Court in the said territories for service or execution. After execution of summon or search warrant received from a Contracting State, the documents or other things produced or things found during search shall be forwarded to the Court issuing the summons or searchwarrant through the specified Authority [Section 59].

 

 53). Whether the property involved in money laundering and located in the Contracting State can also be attached or seized?

                      Yes. In such cases, after issue of an order for attachment of any property made under Section 5 or freezing under Section 17(1A) or confirmation of attachment by Adjudicating Authority under Section 8 or confiscation by Special Court under Section 8, the Special Court, on an application by the Director or the Administrator may issue a Letter of Request to a court or an authority in the Contracting State for execution of such order as per the provisions of corresponding law of that country [Section 60(1)].

 

 

54). What is the punishment for vexatious search?

                Imprisonment for a term which may extend to two years or fine which may extend to fifty thousand rupees or both [Section 62].

 

55). What is the punishment for giving false information or failure to give information, etc.?

                               Any person willfully and maliciously giving false information and so causing an arrest or a search to be made under this Act shall, on conviction, be liable for imprisonment for a term which may extend to two years or with fine which may extend to fifty thousand rupees or both [Section 63(1)].

 

56)What is the punishment if a person being legally bound to state the truth of any matter refuses to answer any question put to him, refuses to sign any statement made by him, or omits to attend or produce books of account or documents at the place or time in compliance of summon issued under section 50?

                      Penalty – A sum which shall not be less than five hundred rupees but which may extend to ten thousand rupees for each such default or failure, can be imposed. Further, a person who intentionally disobeys any direction issued under Section 50 shall also be liable 34 to be proceeded against under Section 174 of the Indian Penal Code, 1860 [(Section 63 (3 & 4)].

 

57). Whether a suit can be brought in civil court to set aside or modify any proceedings taken or made under PMLA, 2002?

                                         No suit can be brought in any civil court to set aside or modify any proceeding taken or order made under PMLA, 2002 and no prosecution, suit or other proceeding shall lie against the Government or any officer of the Government for anything done or intended to be done in good faith under the PMLA, 2002 [Section 67].

 

58)What are provisions when the offence of money laundering is committed by companies?

(1) Where a person committing a contravention of any of the provisions of this Act or of any rule, 35 direction or order made there under is a company, every person who, at the time the contravention was committed, was in charge of, and was responsible to the company, for the conduct of the business of the company as well as the company, shall be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly :

           Provided that nothing contained in this subsection shall render any such person liable to punishment if he proves that the contravention took place without his knowledge or that he exercised all due diligence to prevent such contravention.

(2) Notwithstanding anything contained in subsection (1), where a contravention of any of the provisions of this Act or of any rule, direction or order made there under has been committed by a company and it is proved that the contravention has taken place with the consent or connivance of, or is attributable to any neglect on the part of any director, manager, secretary or other officer of any company, such director, manager, secretary or other officer shall also be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly.

(3) Further, a company may be prosecuted notwithstanding whether the prosecution or conviction of any legal juridical person shall be contingent on the prosecution or conviction of any individual [Section 70].

 

59)What is the mechanism to recover the fine or penalty imposed on any person under Section 13 or Section 63?

            Where any fine imposed on any person under section 13 or section 63 is not paid within six months from the day of imposition of fine or penalty, the Director, FIUInd or Director of Enforcement or any other officer authorised by them in this behalf may proceed to recover the amount from the said person in the same manner as prescribed in Schedule II of the Incometax Act, 1961 (43 of 1961) for the recovery of arrears and he or any officer authorised by him in this behalf shall have all the powers of the Tax Recovery Officer mentioned in the said Schedule for the said purpose [Section 69].

 

60)What will happen if there is conflict between the provisions of PMLA, 2002 and other Acts / laws?

                    The provisions of PMLA, 2002 have over-riding effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force [Section 71].

 

61). What will happen to the proceedings initiated under PMLA, 2002 in the event of death or insolvency of the person?

                In cases where any property of a person has been attached under section 8 and no appeal against the order attaching such property has been preferred, then, the legal representatives or the official assignee or the official receiver may prefer an appeal to the Appellate Tribunal / High Court or to continue the appeal before the Appellate Tribunal / High Court, in place of such person [Section 72].

 

62). THE major Acts covered in the Schedule:-

(a) Indian Penal Code, 1860;

(b) NDPS Act, 1985;

(c) Unlawful Activities (Prevention ) Act, 1967;

(d) Prevention of Corruption Act, 1988;

(e) Customs Act, 1962;

(f) SEBI Act, 1992;

(g) Copyright Act, 1957;

(h) Trade Marks Act, 1999;

(i) Information Technology Act, 2000;

(j) Explosive Substances Act, 1908;

(k) Wild Life (Protection) Act, 1972;

(l) Passport Act, 1967;

(m) Environment Protection Act, 1986;

(n) Arms Act, 1959.

and  others

 

   

ANTI-MONEY LAUNDERING - AML

                       

 

1).What is 'Anti Money Laundering - AML'

Anti money laundering (AML) refers to a set of procedures, laws and regulations designed to stop the practice of generating income through illegal actions. Though anti-money-laundering laws cover a relatively limited number of transactions and criminal behaviors, their implications are far-reaching. For example, AML regulations require institutions issuing credit or allowing customers to open accounts to complete due-diligence procedures to ensure they are not aiding in money-laundering activities. The onus to perform these procedures is on the institutions, not on the criminals or the government.

 

2.BREAKING DOWN 'Anti Money Laundering - AML'

       Anti-money-laundering laws and regulations target activities that include market manipulation, trade of illegal goods, corruption of public funds and tax evasion, as well as the activities that aim to conceal these deeds.Money that's obtained illegally through actions such as drug trafficking needs to be cleaned. To do so, the money launder runs it through a series of steps to make it appear like it was earned legally. Once there's a record to show how the money was earned, the criminals hope it will not arouse suspicion.

 

          One of the most common ways to launder money is to run it through a legitimate cash-based business owned by the criminal organization. Money launderers may also sneak cash into foreign countries for deposit, deposit it in smaller increments or buy other cash instruments. Launderers often want to invest, and brokers will occasionally break rules to earn larger commissions.It's up to financial institutions that issue credit or allow customers to open accounts to investigate customers to ensure they are not taking part in a money-laundering scheme. They must verify where large sums of money originated, monitor suspicious activities and report cash transactions exceeding $10,000. In addition