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

Under section 23 of the PMLA, 2002, where money-laundering involves two or more inter-connected transactions and one or more are proved to be involved in money-laundering, what is the legal effect on the remaining transactions?

The remaining transactions are presumed to form part of the inter-connected transactions. This presumption is rebuttable, since it holds unless otherwise proved to the satisfaction of the Adjudicating Authority or the Special Court, and it applies to adjudication or confiscation under section 8 and to trial.

  1. AThey are presumed to form part of the inter-connected transactions, unless otherwise proved to the satisfaction of the Adjudicating Authority or Special CourtCorrect
  2. BThey are automatically exempt from adjudication until separately proved
  3. CThey are conclusively treated as proceeds of crime with no right of rebuttal
  4. DThey are examined only by the Inter-ministerial Co-ordination Committee

Explanation

Section 23 creates a rebuttable presumption that the remaining transactions form part of the inter-connected transactions, applicable for adjudication or confiscation under section 8 or for trial. It can be displaced by proof to the satisfaction of the Adjudicating Authority or Special Court, so the conclusive-presumption option is wrong.

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