SAFEMA Tribunal affirms PMLA attachment of properties acquired before the offence, treating them as 'proceeds of crime' under Section 2(1)(u) when actual assets are unavailable.
SAFEMA Upholds PMLA Attachment of Pre-Crime Acquired Property
In a significant ruling, the Special Admiralty in Financial and Economic Matters Act (SAFEMA) Tribunal has sustained the attachment of 45 properties under the Prevention of Money Laundering Act (PMLA), despite their acquisition before the predicate offence. The decision hinges on the interpretation of 'proceeds of crime' under Section 2(1)(u) PMLA.
The tribunal held that when the actual proceeds of crime are untraceable or unavailable, equivalent value assets—even those acquired prior to the offence—may be attached. The ruling emphasizes that ownership timing does not preclude attachment if the property serves as value substitute for laundered funds.
This expansive interpretation reinforces investigative agencies' powers under PMLA and raises implications for property due diligence. Legal professionals must counsel clients on the risks associated with holding high-value assets, even if lawfully acquired, in the context of potential PMLA scrutiny.
Citations
- Section 2(1)(u), Prevention of Money Laundering Act, 2002