In its decision on Wednesday regarding petitions challenging the Act, the Supreme Court reprinted passages from speeches made in Parliament by Yashwant Sinha and P Chidambaram as the finance ministers on the Prevention of Money Laundering Act, one of which, notably, was filed by Karti Chidambaram.
The two FMs supported tougher PMLA regulations, claiming that money laundering presented a severe threat to the integrity and sovereignty of the nation and that the Act’s revisions were simply a natural progression.
According to SC, Sinha ‘laid the tone for the years to come in the fight against money laundering’ in his speech in December 1999. Additionally, it stated that P. Chidambaram discussed the necessity of amending the Act in his speech to the Rajya Sabha in December 2012.
A number of the Act’s clauses had been contested by his son Karti Chidambaram as being unconstitutional, but the SC upheld them on Wednesday. Chidambaram and his son are being investigated by the CBI and ED for possible ‘money laundering.’
‘Money-laundering, that is the cleansing of proceeds of crimes such as extortion, treason, drug trafficking, gun running etc., poses a serious threat to the integrity and sovereignty of a country and also to its financial systems. This threat to the nation and its economy has been recognised the world over,’ Sinha stated in his House speech as FM in 1999.’The point I am making is that we have picked up certain offences which are heinous, as I said in the beginning, which are of very serious nature. We are bringing this legislation on money laundering so that receipts from those crimes and properties acquired as a result thereof, are dealt with under this Act.’
Money laundering is a very ‘technically defined’ offence, according to Chidambaram, who stated this in a speech to the Rajya Sabha while serving as the FM in December 2012. ‘It is not the way we understand money laundering in a colloquial sense. It is a technically-defined offence… It is more than simply converting black money into white or white money into black. Initially, the thinking was unless a person was convicted of the predicate offence, you cannot convict him of money laundering. But that thinking is evolved now. The Financial Action Task Force has now come around to the view that if the predicate offence has thrown up certain proceeds and you dealt with those proceeds, you could be found guilty of offence of money laundering. What we are trying to do is to bring this law on lines of laws that are commended by FATF and all countries have obliged to bring their laws on the same lines… All I am trying to say is that this is an evolutionary process,’
SC also made reference to a statement made by Nirmala Sitharaman, the finance minister, during a discussion on the Finance Bill, 2019, in which she said it would be incorrect to imply that money laundering is ‘a one-time instantaneous offence’.