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CS Executive · Economic, Commercial and Intellectual Property Laws · Prevention of Money Laundering

Under Section 4 of the PMLA, 2002, what is the basic punishment for the offence of money-laundering, where the proceeds relate to an offence outside paragraph 2 of Part A of the Schedule?

The basic punishment is rigorous imprisonment for a term of not less than three years but extending up to seven years, and the offender is also liable to fine. The old five lakh rupee cap on fine was removed, and the ten-year limit applies only to specified paragraph 2 offences.

  1. ASimple imprisonment up to three years with a fine of up to five lakh rupees
  2. BRigorous imprisonment of not less than three years but up to seven years, and liable to fineCorrect
  3. CRigorous imprisonment of not less than seven years but up to ten years, and liable to fine
  4. DRigorous imprisonment up to ten years only, with no fine

Explanation

Section 4 prescribes rigorous imprisonment of at least three and up to seven years, plus liability to fine. The cap of five lakh rupees on the fine was omitted in 2013, so option A is wrong. The ten-year limit applies only under the proviso for paragraph 2 of Part A offences.

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