Money Laundering Probe against a Political Party

Current Affairs, Governance

The Enforcement Directorate (ED) is contemplating adding a political party as an accused in a money laundering probe linked to the now-defunct Excise Policy of the Delhi government.

Booking a Political Party for Money Laundering

  • Relevant Law: In this instance, Section 70 of the Prevention of Money Laundering Act (PMLA), which handles corporate offenses, may be applied.
  • What “Company” means: Political parties are not considered “companies” under the Companies Act; nevertheless, the PMLA has an explanation that expands the definition to include “associations of individuals,” which may include political parties.

Precedents for such Cases

  • This action might create a big legal precedent in India if it is pursued.
  • Political parties have been the subject of Income Tax Act investigations in the past.
  • According to a Finance Ministry announcement, trusts and non-governmental organizations are already covered by the PMLA.

Connection between Charges and Political Party

  • The primary accusation made by the ED is that the political party was given the money obtained through the excise scam.
  • Section 70 of the PMLA provides further clarification by stating that a firm can be punished regardless of whether the prosecution or conviction of any individual will depend on the prosecution or conviction of another legal juridical person.
  • This suggests that the party may still face separate prosecution for money laundering even in cases where cases involving party members are unsuccessful.

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