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Money laundering Bill may be drafted afresh

Hema Ramakrishnan

NEW DELHI, July 29

THE Government is looking at the option of withdrawing the Prevention of Money Laundering Bill (PMLB) which is pending passage before Parliament, and drafting the entire legislation afresh, following reservations expressed by the Finance Ministry on some of the crucial recommendations made by the Select Committee.

Although the existing Bill has been listed in C category for the ongoing session of Parliament, official amendments are yet to be ratified by the Union Cabinet. Sources said that the Finance Ministry, late last year, withdrew the Cabinet note since the o fficial amendments proposed by it were at variance with the recommendations made by the Select Committee of Rajya Sabha.

The Finance Ministry has not accepted the definition of the offence of money laundering recommended by the Select Committee, on the grounds that it would dilute the legislation and also result in litigation.

Under the PMLB, any one who acquires, owns, possesses, or transfers any proceeds of crime or knowingly enters into any transaction which is related to the proceeds of crime directly or indirectly and also conceals or aids in the concealment of the procee ds of crime, commits the offence of money laundering.

The Select Committee had recommended that the offence be defined as ``whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity concerned with the proceeds of crim e and projecting it as untainted property shall be guilty of the offence of money-laundering.''

Besides, the Ministry is also not in favour of tightening the noose further on officials or authorities exercising powers under this legislation if they conduct a search or arrest on any person vexatiously or without reasonable ground for suspicion.

The Government has a couple of options now -- move official amendments fully endorsing the recommendations of the Select Committee; or refer the Bill back to the Select Committee which, in turn, could decide to throw it open for wider public debate.

The other option is to withdraw the Bill and draft the legislation afresh. The Government is empowered to exercise the last option under certain circumstances notwithstanding the fact that the Bill is the property of the House, said sources.

For the record, senior officials maintain that efforts would be made to resolve the differences with the Select Committee. The passage of the PMLB -- which was introduced in 1998 to go hand in hand with the Foreign Exchange Management Act -- is crucial a s the US has already put India on its watch list on this front.