The Prevention of Money Laundering Act, 2002 (PMLA) was enacted with three primary objectives aimed at strengthening India’s financial and legal framework against illicit activities.
1. To prevent and control money laundering
PMLA provides a structured legal mechanism to identify, monitor, and prevent money laundering. It enables authorities to detect suspicious transactions, investigate offenders, and impose penalties on those involved in laundering illicit funds.
2. To confiscate and seize property obtained through laundered money
The Act empowers the Enforcement Directorate (ED) to attach, freeze, and confiscate assets derived from money laundering activities. This ensures that offenders are deprived of the monetary benefits gained from criminal conduct.
3. To address matters connected with or incidental to money laundering
PMLA covers a wide range of related issues including the prevention of terrorist financing and enhancement of financial system integrity. The Act strengthens oversight mechanisms and supports national security objectives.
PMLA also aligns India with international standards set by the Financial Action Task Force (FATF) and fulfills commitments under global conventions such as the Vienna Convention, aimed at combating economic and financial crimes.
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