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Prevention of Money Laundering Act

Context:

• Money laundering is a severe crime that negatively impacts a country's social and economic well-being and has been linked to the rise of serious offenses such as terrorism and drug trafficking in India. It is a growing problem that needs to be resolved.
• The Prevention of Money Laundering Act (PMLA) was created in 2002 and has been modified multiple times to enhance its ability to tackle money laundering.
• Several petitions have been submitted throughout the country questioning the wide-ranging authority given to the Enforcement Directorate under PMLA to search, seize, investigate, and confiscate assets linked to criminal activity.

Overview of the Prevention of Money Laundering Act (PMLA), 2002

Definition of Money Laundering

• Money Laundering is the process of converting or hiding the illegal proceeds of crime by disguising them as legitimate funds.

Criminal Offence in India

• Money Laundering is considered a criminal offence in India, and the statutory provisions of the Prevention of Money Laundering Act, 2002, provide charges against the offenders.

Response to Global Commitment

• The PMLA was enacted to fulfil India's global commitment to combat money laundering as per the Vienna Convention. It is based on various international agreements and recommendations, including the United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, Basle Statement of Principles, Forty Recommendations of the Financial Action Task Force on Money Laundering, and Political Declaration and Global Program of Action adopted by the United Nations General Assembly.

Applicability to all persons

• The PMLA applies to all persons, including individuals, companies, firms, partnership firms, associations of persons or incorporations, and any agency, office, or branch owned or controlled by any of these persons.

Introduction to recent amendments in PMLA

The Prevention of Money Laundering Act (PMLA) has recently undergone significant amendments to redefine and clarify the scope of the offence. This includes changes to the definition of proceeds of crime and money laundering, as well as the continuing nature of the offence.

Clarification about the position of proceeds of crime:

• The recent amendments in PMLA have clarified that proceeds of crime not only include property derived from scheduled offences but also any other property derived or obtained from criminal activities related or similar to the scheduled offence.

Redefinition of money laundering

• Previously, money laundering was not considered an independent crime but was dependent on another crime, known as the predicate offence or scheduled offence. The recent amendment seeks to treat money laundering as a stand-alone crime. Under Section 3 of PMLA, a person shall be accused of money laundering if they are directly or indirectly involved in the proceeds of the crime through concealment, possession, acquisition, use, projection as untainted property, or claiming as untainted property.

Continuing nature of the offence

• The recent amendment further mentioned that a person will be considered to be involved in the offence of money laundering until the time they are getting the fruits of activities related to money laundering, as this offence is of a continuing nature.

Concerns raised about the amendments in PMLA

• Despite the amendments in PMLA, there are still some concerns about the possible misuse of powers, issues with ECIR, and the contrast to general criminal law. Additionally, the burden of proof has been shifted to the accused persons, and they are bound to be a witness against themselves, which is violative of the right against self-incrimination. 
• Furthermore, the inefficiency of ED under this law is also a matter of concern, as the conviction rate of Enforcement Directorate under this law is very low, despite thousands of cases registered, people arrested, and lives turned upside down.

The Current Stand of Supreme Court Regarding the Amendments in PMLA

• The Supreme Court recently upheld the constitutional validity of the provisions of the PMLA, calling it a “unique and special legislation” underlining the powers of the ED.
• The SC ruled that no comparison can be drawn between PMLA and Criminal Procedure Code (1973).
• The mechanism regarding prevention, investigation, or trial in connection with the scheduled offence is included in the PMLA.
• The ECIR cannot be equated with FIR.
• Supply of ECIR to the accused is not mandatory, and only disclosure of reasons during arrest is enough, but the accused can be merely informed about the grounds for arrest.

Internal Checks and Balances

• There should be a consensus between the adjudicating authority and the officers of ED to abide by the constitutionality of provision under PMLA, making the investigation more lucid.
• Law has given stringent powers to the ED in dealing with the accused that can increase the possibility of political misuse.
• Internal checks and balances should be put in place to prevent any misuse of powers.

Ensuring the Process Itself Should not Become Punishment

• The ED's expanded powers should be welcomed with a greater commitment to expeditiously resolve the cases.
• The process itself should not become punishment.
• Both the judiciary and enforcement agencies should move forward with speedy trials and convictions.

Operational Vigilance for Improvement

• There must be constant scrutiny over the operations of the Enforcement Directorate and current disposition.
• The clarification on amendments should improve the conviction rate (which is right now less than half a percent).
• If there are any lacunas in the operative part, change is the law of nature, and these gaps can be filled either through suitable legislation, executive action, or revised order of the apex court.

What is the Enforcement Directorate?

The Directorate of Enforcement is a specialized financial investigation agency that falls under the Ministry of Finance, Department of Revenue. It was established as an 'Enforcement Unit' in the Department of Economic Affairs in 1956 to handle violations of Exchange Control Laws. In 1957, it was renamed as the 'Enforcement Directorate.' The agency is responsible for enforcing two key laws: the Foreign Exchange Management Act (FEMA) of 1999 and the Prevention of Money Laundering Act (PMLA) of 2002.

Joint Theatre Commands of Tri-Services

Why in news:

• The Indian Defence Minister recently declared the formation of tri-services joint theatre commands, with the aim of improving coordination among the armed forces.

Overview of Joint Theatre Commands

• The Indian Defence Minister recently announced the establishment of Joint Theatre Commands to increase coordination among the three branches of the armed forces.

Idea behind Theatre Command System:

• The main idea behind the Theatre Command System is to enhance synergistic coordination between the army, navy, and air force.

Objectives of Theatre Command System:

• The objective of the Theatre Command System is to establish separate commands for the army, navy, and air force under a unified command with a single commander. The integration process would lead to the unification of military assets under one operational head, responsible for directing and controlling their activities in a given situation. Moreover, the theatre command system aims to bring greater focus on resource allocation and reduce redundancies.

Existing Joint Services Commands in India:

• India currently has two joint services commands: the Andaman and Nicobar Command (ANC) and the Strategic Forces Command (SFC).

Andaman and Nicobar Command:

• The Andaman and Nicobar Command (ANC) is the only one of its kind in India that amalgamates the army, navy, and air force. Set up in 2001, it is based in Port Blair and covers India's strategic interests in Southeast Asia and the Malacca Strait.

Strategic Forces Command:

• The Strategic Forces Command (SFC) manages India's nuclear assets and is not related to any specific theatre of war.

Countries following Theatre Command System:

• Several countries worldwide have implemented some form of theatre or joint command to improve coordination among their military forces. The USA was the first to establish a theatre command system, with six geographical and four functional commands currently in place. Russia started restructuring its defence forces in 2008 and has four theatre commands. China's theatre command system is based on the US model and has "five peacetime geographical commands," with the Chinese Western Theatre Command covering the region along the Indian border.

India's Shift towards Defence Exports

Overview: India has set its sights on becoming a major defence exporter, with a goal of increasing defence exports to Rs 35,000 to Rs 40,000 crore by 2025-26.

Current Status: India has already begun defence exports worth Rs 13,000 crore, and is now among the top 25 countries in the world engaged in defence exports.

Challenges: The integration of the three branches of the armed forces under the Theatre Command System poses a range of challenges related to operational command and control over assets, budgetary allocations, fund distribution, and assets between the army, navy, and air force. The vertical split of multiple commands across the nation presents additional complications.

The Way Ahead: The proposed creation of four theatre commands, including air defence, maritime, integrated eastern and integrated western theatre commands, will promote jointness among the three branches of the armed forces. It will boost the overall fighting capabilities of the Indian armed forces, create capacities to adapt to the requirements of hybrid warfare, and establish seamless command centres to meet future challenges.

Insurgency in Manipur

Why in news:

• The Central Government of India has declared its willingness to initiate talks with insurgency groups in Manipur to establish peace in the region.
• The insurgency in Manipur began in 1964, when the United National Liberation Front (UNLF) was established.
• The UNLF remains one of the most powerful militant groups in the region.

Reasons behind the Insurgency in Manipur

• Forced Merger: The insurgency in Manipur is mainly due to discontent over the alleged "forced" merger of Manipur with the Union of India and the delay in granting it full-fledged statehood.
• Rise of Militancy: A number of militant outfits emerged in Manipur, including the PLA, PREPAK, KCP, KYKL, among others, who demand an independent Manipur.
• Spillover Effect of Greater Nagalim Demand: The Naga movement in Nagaland spilled over into Manipur's hill districts with the NSCN-IM controlling most of it while pressing for "Nagalim," which is perceived as a threat to Manipur's territorial integrity.
• Valley-Hills Conflict: The Meitei community forms the majority in the Imphal valley, while the surrounding hill districts are inhabited by Nagas and Kukis, leading to conflict between the two.
• Naga-Kuki Conflict: Ethnic clashes between Nagas and Kukis in the early 1990s led to the formation of several Kuki insurgent groups, which have now scaled down their demand from a separate Kuki state to a Territorial Council.

Steps Taken by the Government to Address Insurgency in Manipur:

Military Action:

• The controversial Armed Forces Special Powers Act (AFSPA) was imposed in 1980 to suppress the insurgency movement, which remains in force till date.
• Assam Rifles and the army had conducted operation “All Clear” in the hill areas, most of the militants’ hideouts had been neutralised.

Ceasefire Agreement:

• The NSCN-IM entered a ceasefire agreement with the Government of India in 1997, even as peace talks between them have still been continuing.
• The Kuki outfits signed the tripartite Suspension of Operation (SoO) pacts with the Governments of India and Manipur on August 22, 2008.

Challenges in Restoring Peace in Manipur

Many Conflicting Demands:

• The central government’s approach of a peaceful settlement with the militant outfits has proved counterproductive.
• The demands of many of the outfits conflict with each other.

Proxy Groupings:

• There has been a tendency for the groups to continue the armed rebellion by another faction, with merely a change in nomenclature or by forming a new group.

Politician-Insurgents Nexus:

• The nexus between the politicians and insurgents and criminals adds to the woes of the state.
• Some of the outfits operate as criminal gangsters thriving on extortion, kidnapping and contract killings.

Border State:

• Manipur being a border state, with a porous international border in a hostile jungle environment, the inflow of arms and trans-border movement of insurgent outfits who rely on external countries for training and other required logistics support are continuing.

Proposals for a Way Forward in Manipur

Good Governance:

• Establish a transparent government and fair judiciary system
• Uphold the rule of law
• Provide basic amenities like hospitals, schools, and police stations
• Ensure political sincerity and proper distribution of funds for development in both valley and hill areas
• Encourage economic development through government, semi-government, and private entrepreneurship participation

Border Management:

• Properly manage the Indo-Myanmar international border before initiating any counter-insurgency policy/operations

Engaging With People:

• Improve connectivity and intermingling among diverse communities of Manipur with mainland India
• Use NGOs, women’s associations, and cultural programs to restore confidence among valley and hill masses
• Encourage national integration through effective engagement with the people.

China’s new High-Tech Aircraft Carrier Fujian

Why in news: 

• China has revealed its first domestically built aircraft carrier, called the Fujian (Type 003), which means it now has the largest number of aircraft carriers in the world, surpassing the United States.

What is Fujian?

About Fujian:

• Fujian named after China's coastal province located across from Taiwan.
• China's third aircraft carrier after Shandong (Type 001) and Liaoning (Type 002).
• Fujian is more technologically advanced than its predecessors.

Features of Fujian:

• Displacement of 80,000 tonnes, much more than the existing Chinese carriers.
• Fitted with the latest launch technology - Electromagnetic Aircraft Launch System (EMALS), first developed by the U.S. Navy.
• Straight flat-top flight deck for take-offs and landings.
• Previous Chinese carriers use a ski jump-style ramp.

Significance for China:

• China has staked claim over almost all of the South China Sea and Taiwan Straits.
• Fujian provides China with more room to operate in the South China Sea and Taiwan Straits.
• Capabilities of Fujian provide China with a leeway to head to India's backyard, where it is increasing its presence.
• China has already acquired the Hambantota port in Sri Lanka as a debt swap and is modernizing Pakistan's Gwadar port on the Arabian Sea.
• The U.S. remains far ahead in military strength with 11 nuclear-powered vessels, followed by China, Britain, and Italy.

Status of Aircraft Carrier in India

INS Vikramaditya:

• Largest aircraft carrier and warship of Indian Navy
• Converted from Russian Navy's Admiral Gorshkov/Baku
• Modified Kiev-class aircraft carrier
• Commissioned into service in November 2013
• Uses STOBAR mechanism with an angular ski-jump
• STOBAR combines "short take-off and vertical landing" with "catapult-assisted take-off but arrested recovery"

INS Vikrant:

• India's second aircraft carrier
• Set to be commissioned later this year
• Uses CATOBAR system to launch aircraft
• Construction puts India in a select group of countries with state-of-the-art aircraft carriers

Operational Modalities:

• Warship will operate MiG-29K fighter jets, Kamov-31 helicopters, MH-60R multi-role helicopters, and indigenously manufactured Advanced Light Helicopters (ALH)
• According to Indian Navy

EMALS: Electromagnetic Aircraft Launch System

About EMALS:
(i) Catapult system that provides extra push to aircraft
(ii) Helps aircraft gain speed required to take off
(iii) Two types of catapult systems: steam-powered and electromagnetic (EMALS)
(iv) EMALS uses linear induction motors to generate electromagnetic force for aircraft launch
(v) Compared to steam catapults, EMALS is more reliable, requires less maintenance, recharges faster, takes up less space, and is energy-efficient

India's Status on EMALS:
(i) U.S. provided India with EMALS technology in 2017
(ii) Navy dropped plan to install EMALS due to budget constraints
(iii) State-owned Bharat Electronics Limited in Bengaluru reportedly working on EMALS model for CATOBAR operations on Indian warships.

National Investigation Agency

Why in news:

• The National Investigation Agency (NIA) has taken over the investigation of the brutal murder of a pharmacist in Amravati, Maharashtra, which was handed over by the Union Home Ministry.

National Investigation Agency (NIA): India's Central Counter-Terrorism Law Enforcement Agency

About NIA:

• Mandated to investigate offences affecting India's sovereignty, security, and integrity
• Includes crimes related to foreign relations, nuclear facilities, smuggling, and international laws
• Constituted under the National Investigation Agency (NIA) Act, 2008
• Empowered to investigate terror-related crimes across states without special permission from the states
• Headquarters located in New Delhi
• Established in 2009 after the 26/11 Mumbai terror attack
• Has registered 447 cases till date

Origin of NIA:

• Established in the wake of the 26/11 Mumbai terror attack in November 2008
• National Investigation Agency Bill introduced by former Union Home Minister P. Chidambaram in December 2008
• Agency came into existence on December 31, 2008

Jurisdiction of NIA:

• Operates throughout India and applies to Indian citizens outside the country
• Covers government officials, persons on ships and aircraft registered in India, and persons who commit a scheduled offence beyond India against Indian citizens or India's interests

How does the NIA take up a probe?

Referral by State Government:

• State governments can refer cases pertaining to scheduled offences to the Central government (Union Home Ministry) for NIA investigation under Section 6 of the NIA Act.
• After assessing the details, the Centre can direct the agency to take over the case.
• State governments are required to provide assistance to the NIA.

Referral by Central Government:

• The Central government can direct the NIA to take up investigation of a scheduled offence committed within or outside India.

Sanction:

• For prosecuting the accused under UAPA and certain other scheduled offences, the agency seeks sanction of the Central Government.
• The sanction is granted under the UAPA based on the report of the ‘Authority’ constituted under section 45 (2) of the UAPA.

Other:

• There is an exclusive Left Wing Extremism (LWE) cell to deal with cases related to terror financing aspects of Naxalite groups.
• While investigating any scheduled offence, the agency can investigate any other offence connected to the scheduled offence.
• After investigation, the cases are placed before the NIA Special Court.

What is NIA Special Courts?

Composition:

• Special Courts are constituted by the Central Government under Section 11 and 22 of the NIA Act 2008.
• The Special Court is presided over by a judge appointed by the Central Government on the recommendation of the Chief Justice of the High Court.
• The Central Government may appoint additional judges if required.

Jurisdiction:

• The Special Courts have all powers of the court of sessions under the Code of Criminal Procedure, 1973.
• The Central Government decides on the jurisdiction of any Special Court.
• The Supreme Court and the High Court have the power to transfer cases pending before a Special Court to another Special Court.

Recent Amendments to the NIA Act 2008

The National Investigation Agency (NIA) Act 2008 has been amended in 2019 to speed up the investigation and prosecution of certain offences, including those committed outside India. The amendments are focused on three main areas:

Offences outside India:

• The original Act allowed NIA to investigate and prosecute offences within India only.
• The amendment has empowered the agency to investigate offences committed outside India, subject to international treaties and domestic laws of other countries.

Widening the scope of Law:

• The amendment has allowed the NIA to investigate additional cases related to:
• Human trafficking
• Counterfeit currency or banknotes
• Manufacture or sale of prohibited arms
• Cyber-terrorism
• Offences under the Explosive Substances Act, 1908.

Special Courts:

• The 2008 Act constituted Special Courts for conducting the trial of offences under the Act.
• The 2019 amendment allowed the central government to designate Sessions Courts as Special Courts for the trial of scheduled offences under the Act.
• The central government is required to consult the Chief Justice of the High Court under which the Sessions Court is functioning, before designating it as a Special Court.
• State governments may also designate Sessions Courts as Special Courts for the trial of scheduled offences.

EX VINBAX 2022

Why in news:

• The 3rd edition of the Vietnam-India Bilateral Army Exercise “Ex VINBAX 2022” is currently being held in India.
• Defence cooperation is a crucial component of the Comprehensive Strategic Partnership that India and Vietnam share.
• Vietnam holds significant importance in India's Act East Policy and the Indo-Pacific vision.

Overview of Ex VINBAX

• Ex VINBAX is a bilateral field training exercise between the Indian Army and Vietnam People’s Army.
• The exercise has an enhanced scope compared to previous editions, with a focus on humanitarian assistance and disaster relief operations.
• It aims to strengthen mutual confidence, interoperability and enable sharing of best practices between the two armies.
• It also provides an opportunity for troops to learn about each other's social and cultural heritage.

HADR Demonstration and Equipment Display:

• The exercise will include a Humanitarian Assistance and Disaster Relief (HADR) demonstration and equipment display.
• The demonstration will showcase India’s capacity to undertake rescue and relief operations during natural and manmade disasters using indigenous solutions.

Theme of Ex VINBAX:

• The theme of Ex VINBAX is the employment and deployment of an Engineer Company and a Medical Team as part of United Nations Contingent for Peacekeeping Operations.