SAFEMA Tribunal upholds attachment of pre-offence, legitimately acquired property as equivalent value of proceeds of crime under PMLA when actual proceeds are unavailable.
SAFEMA Permits Equivalent Value Attachment of Pre-Offence Assets
The Special Additional Judge (FEMA) [SAFEMA] Tribunal has affirmed that property acquired prior to the scheduled offence can be attached under Section 5(1) of the Prevention of Money Laundering Act (PMLA), 2002, as 'property of equivalent value' if the actual proceeds of crime cannot be traced or recovered.
The Tribunal observed that
"the objective of PMLA is not merely punitive but also preventive and restorative — enabling the State to recover the monetary benefit derived from criminal activity, irrespective of when the asset was acquired."The decision relied on the amended PMLA framework and Supreme Court precedents affirming the expansive scope of attachment powers.
This ruling expands enforcement agencies’ ability to target benami and layered assets. Legal practitioners must anticipate challenges to pre-offence acquisitions in PMLA cases, especially where laundering involves complex financial structuring.
Citations
- Prevention of Money Laundering Act, 2002, Section 5(1)
