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CMA Final · Cost and Management Audit · Anti-Money Laundering

Firm X is shown to have routed funds through five bank transactions that were inter-connected. One of them is proved to be involved in money-laundering. Under Section 23 of the PMLA, 2002, what follows for the remaining four transactions in adjudication or trial?

The remaining transactions are presumed to be part of the inter-connected transactions, unless the person proves otherwise to the satisfaction of the Adjudicating Authority or the Special Court. The presumption is rebuttable and applies for adjudication or confiscation and for the trial of the offence.

  1. AThey are conclusively held to be lawful unless separately proved tainted
  2. BThey are presumed to form part of the inter-connected transactions unless otherwise proved to the satisfaction of the Adjudicating Authority or Special CourtCorrect
  3. CThey must be ignored because only the proved transaction can be confiscated
  4. DThey are presumed to be scheduled offences in themselves

Explanation

Section 23 says that where money-laundering involves two or more inter-connected transactions and one or more is proved to be involved, the remaining ones shall be presumed to form part of the inter-connected transactions, unless otherwise proved to the satisfaction of the Adjudicating Authority or Special Court. The presumption is rebuttable, so options claiming conclusive lawfulness or irrelevance are wrong.

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