Cross-Border Money-Laundering under PMLA: Foreign Assets, Part C Offences and Mutual Assistance
Money-laundering frequently crosses borders through overseas companies, accounts, trusts, trade transactions and digital assets. PMLA addresses this through an expanded definition of proceeds, Part C of the Schedule and reciprocal-assistance provisions.
Property outside India
Section 2(1)(u) includes property derived or obtained from scheduled criminal activity and contains an equivalent-value mechanism where property is taken or held abroad. The definition of property is broad and includes tangible and intangible assets and instruments evidencing title or interest, wherever located.
Part C scheduled offences
Part C addresses offences with cross-border implications. A foreign act cannot be assumed to be a scheduled offence merely because it appears criminal. The statutory correspondence, cross-border element, contracting-state framework and Indian legal ingredients must be established.
Letters of request and reciprocal arrangements
Sections 55 to 61 provide mechanisms for assistance to and from contracting States, including evidence collection, execution of requests and attachment or confiscation-related cooperation. These provisions operate through courts, competent authorities and notified arrangements; an investigator’s informal foreign communication is not always a substitute for the prescribed evidentiary route.
Proof and admissibility
Foreign bank statements, corporate records and witness material raise questions of certification, authenticity, translation and chain of custody. The Bharatiya Sakshya Adhiniyam, 2023 and the applicable procedural law govern proof. A defence should test both the substance and the route by which the material entered the record.
Equivalent assets in India
Where the alleged proceeds are abroad, ED may seek equivalent value held in India within the statutory framework. The order must still identify and value the foreign proceeds and avoid duplicative restraint in multiple jurisdictions. Information that another country has frozen an asset may be relevant to proportionality.
Businesses should preserve beneficial-ownership records, cross-border contracts, transfer-pricing support, customs material and remittance documentation. Complexity or offshore structure alone is not laundering, but unexplained control and circular movement can supply significant evidence.
Cross-border enforcement succeeds when statutory correspondence, authenticated evidence and coordinated restraint replace assumption based on geography.
Sources
Prevention of Money-Laundering Act, 2002, Sections 2, 55 to 61 and Part C of the Schedule: https://www.indiacode.nic.in/handle/123456789/15402
Bharatiya Sakshya Adhiniyam, 2023: https://www.indiacode.nic.in/handle/123456789/20063
Ministry of Home Affairs, Mutual Legal Assistance framework: https://www.mha.gov.in
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