Prevention of Money Laundering Act — Prelims Strategy

Prelims Strategy

For Prelims, the strategy for PMLA should be highly factual and concept-driven. Aspirants must focus on the absolute essentials: the year of enactment (2002), the date of commencement (2005), and the primary enforcement agency (Enforcement Directorate).

Key definitions are paramount: 'money laundering' (Section 3), 'proceeds of crime' (Section 2(1)(u)), and 'scheduled offenses' (the Schedule to PMLA). Memorize the significant amendments (2009, 2012, 2019) and their core contributions, such as making money laundering a standalone offense (2012) and expanding 'proceeds of crime' (2019).

Understand the powers of the ED (arrest, search, seizure, attachment) and the role of the Adjudicating Authority. The concept of 'reverse burden of proof' (Section 24) is a frequent Prelims favorite. Crucially, know the outcome of the Vijay Madanlal Choudhary case (2022) – that most provisions, including ED's powers, were upheld.

Pay attention to the types of 'reporting entities' and the role of the Financial Intelligence Unit (FIU-IND) . Practice MCQs that test these specific facts, definitions, and the sequence of events in PMLA enforcement.

Differentiate PMLA from related laws like FEMA and the Benami Act based on their core objectives and nature of offenses.