The SAFEMA Tribunal upheld attachment of 45 properties under PMLA, ruling that even lawfully acquired or pre-crime assets may be attached if proceeds of crime are unavailable.
SAFEMA Upholds PMLA Attachment of Lawfully Acquired Properties
The Special FEMA Appellate Tribunal (SAFEMA) has sustained the attachment of 45 properties under the Prevention of Money Laundering Act (PMLA), 2002, despite the respondents’ claims of lawful acquisition and ownership prior to the alleged offence. The Enforcement Directorate (ED) had initiated proceedings under Section 5(1) of PMLA for confiscation of property derived from money laundering.
The Tribunal held that Section 2(1)(u) of PMLA permits attachment of 'property equivalent in value' to the proceeds of crime when the actual tainted assets are unavailable.
"Where the proceeds of crime cannot be traced or are dissipated, properties of equivalent value acquired from such proceeds may be attached,"the order stated, affirming the broad remedial scope of PMLA.
The decision clarifies that chronological acquisition or formal legitimacy of title does not immunise property from confiscation if linked to laundering. Practitioners must advise clients on asset tracing risks, especially in cases involving dissipated proceeds and substitute asset attachments.
Citations
- Prevention of Money Laundering Act, 2002, Section 2(1)(u)
