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A continuing offence in the realm of money laundering is a crucial concept to understand. As defined by the Blacks’ Law Dictionary, a continuing offence is one that endures over a period of time, rather than being terminated by a single act or fact.

This article explores the nature of continuing offences in money laundering cases, the statute of limitations, relevant case law, recent amendments to the Prevention of Money Laundering Act (PMLA), and the distinction between money laundering and scheduled offences.

The discussion aims to provide a comprehensive understanding of this complex subject and its implications in the legal landscape.

The Elements of a Continuing Offence in Money Laundering

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Section 3 of the PMLA defines the offence of money laundering, which includes various activities such as concealment, possession, acquisition, use, projecting, or claiming proceeds of crime as untainted property.

A person can be guilty of this offence by directly or indirectly indulging in or assisting with these activities. The explanation under Section 3 establishes that an offence is continuing as long as the person involved directly or indirectly enjoys the proceeds of crime.

The PMLA outlines a specific set of activities that constitute money laundering. For an offence to be considered continuing,

it must involve ongoing activities related to the proceeds of crime. These activities typically involve the handling and management of illicit funds to create the appearance of legitimacy.

In order to better understand the elements of a continuing offence in money laundering, let’s take a closer look at the different aspects of this type of offence:

• Ongoing nature of the crime: A continuing offence is not a one-time act but rather a series of actions or events that occur over an extended period.

This means that the illegal activities associated with money laundering, such as concealing, possessing, acquiring, or using the proceeds of crime, must be ongoing.

• Direct or indirect involvement: A person can be found guilty of a continuing money laundering offence if they are directly or indirectly involved in the crime. This includes knowingly assisting or being a party to the illegal activities.

• Enjoyment of proceeds of crime: The explanation under Section 3 of the PMLA states that a continuing offence persists as long as the person involved is directly or indirectly enjoying the proceeds of crime.

This can include situations where the individual is using the illicit funds for personal gain or hiding the origin of the funds to maintain their appearance of legitimacy.

• Projection of untainted property: Money laundering involves projecting or claiming the proceeds of crime as untainted property. This means that the individual attempts to make the illicit funds appear legitimate by integrating them into the legal financial system.

In conclusion, a continuing offence in money laundering involves a series of ongoing actions that are directly or indirectly connected to the proceeds of crime.

These actions typically revolve around the concealment, possession, acquisition, use, and projection of illicit funds as legitimate assets. As long as the individual continues to enjoy the proceeds of crime in any manner, the offence is considered to be continuing.

Statute of Limitation in Continuing Offences

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The concept of the statute of limitations plays a crucial role in the context of continuing offences, particularly in relation to money laundering cases. As mentioned earlier, there is a key distinction between instantaneous and continuous crimes with respect to the statute of limitations.

For instantaneous crimes, the statute of limitations starts running with the consummation of the crime. In other words, the moment the criminal act is complete, the clock starts ticking, and authorities have a limited time to investigate and prosecute the offender.

On the other hand, for continuous crimes, the statute of limitations only commences with the cessation of the criminal conduct or act. This means that as long as the continuing offence is still in progress, the clock does not start ticking.

This offers authorities more time to conduct a thorough investigation, gather evidence, and ultimately bring the individuals involved in the money laundering offence to justice.

In essence, the nature of continuing offences, such as those under the Prevention of Money Laundering Act (PMLA), allows for a more extended period of investigation and prosecution.

This ensures that those involved in the proceeds of crime and money laundering activities are more likely to face the legal consequences of their actions, ultimately serving as a deterrent to potential offenders.

Case Law on Continuing Offences in Money Laundering

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Several cases have helped shape the understanding of continuing offences in money laundering. Some notable examples include:

• State Of Bihar vs Deokaran Nenshi:

In this case, the court emphasized the distinction between continuing offences and those that occur as a single act or omission. A continuing offence is characterized by the ongoing nature of the illegal activity, while a single act or omission constitutes a one-time offence.

This case highlights the importance of recognizing the ingredient of continuance that differentiates continuing offences from those that occur as a single act or omission.

• Hasan Ali Khan v. Union of India:

The court held that the offence of money laundering is not a continuing offence, and once the proceeds of crime have been projected as ‘untainted property,’ the offence is over.

This ruling clarifies that the act of laundering money is considered complete once the illicit funds have been successfully integrated into the legitimate financial system, even if the proceeds of crime continue to be enjoyed by the offender.

• Golak Patel Volkart Ltd. v. Dundayya Gurushiddaiah Hiremath:

This case establishes that the concept of continuing offence keeps the contravention alive day by day, but does not erase the original guilt.

In other words, even though the illegal activity may continue over an extended period, the initial act that triggered the offence remains relevant for prosecution purposes.

• A.K. Samsuddin V. Union of India:

In this case, the court ruled that the crime of money laundering is separate from the scheduled offences, emphasizing that the Prevention of Money Laundering Act (PMLA) exclusively addresses the methods or actions involving the proceeds of crime.

This decision highlights the distinct nature of money laundering offences under the PMLA, which focus on the handling and disposition of illicit funds rather than the underlying criminal activities that generate these proceeds.

• Hari Narayan Rai V. Union Of India & Ors:

The court clarified that the relevant date for money laundering offences is not the date of acquisition of illicit money, but the dates when such money is processed for projecting it as untainted.

This ruling underscores the importance of focusing on the money laundering activities themselves, rather than the timing of the predicate offences that generate the illicit funds.

• Uday Shankar Awasthi Vs State of UP and another:

The court discussed the essentials of continuing offences, stating that in a continuing offence, the ingredients of the offence continue, while in an instantaneous offence, the offence takes place once and for all.

This distinction is crucial for understanding the nature of money laundering offences under the PMLA, which often involve ongoing activities and transactions that extend over time, rather than discrete, one-time events.

The 2019 Amendments to PMLA and Its Impact on Continuing Offences

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The Finance Act of 2019 introduced significant amendments to the PMLA, particularly in relation to continuing offences. 

Explanation (ii) was added to Section 3 of the PMLA, which established that the offence of money laundering would continue until the person involved derives benefits from the tainted property.

This amendment effectively broadened the scope of money laundering as a continuing offence, as it now encompasses cases where individuals continue to enjoy the proceeds of crime even after the initial laundering activities have been completed.

This important change in the Prevention of Money Laundering Act (PMLA) has led to a shift in the interpretation of money laundering offences.

Prior to this amendment, it was often argued that the offence of money laundering had to involve specific actions, and once the integration of illicit funds was complete, no further offence could be committed.However, with the addition of Explanation (ii), this argument no longer holds water.

Key points to note about the 2019 amendments and their impact on continuing offences are:

• The amendment has allowed the government to target even those offences committed before the introduction of the PMLA or the inclusion of predicate offences in the list of scheduled offences.
• It broadens the scope of money laundering as a continuing offence.
• It addresses cases where individuals continue to enjoy the proceeds of crime after the initial laundering activities have been completed.

These changes have strengthened the law’s ability to prosecute money laundering offences, ensuring that individuals who continue to benefit from the proceeds of crime can be held accountable under the PMLA Act.

The 2019 amendments have effectively widened the net to catch those involved in money laundering, making it more difficult for criminals to evade justice.

Conclusion

Understanding the concept of continuing offences in money laundering cases is essential for legal practitioners, regulators, and financial institutions alike.

The Prevention of Money Laundering Act (PMLA) and various court judgments have contributed to the development of this concept, emphasizing the ongoing nature of money laundering activities and the importance of addressing the proceeds of crime generated from these illicit activities.

The 2019 amendments to the PMLA Act further expanded the scope of continuing offences in money laundering cases, ensuring that individuals who continue to benefit from illicit funds remain within the purview of the law.

This comprehensive approach to tackling money laundering under the Money Laundering Act 2002 emphasizes the need for continued vigilance, cooperation, and effective communication among regulators, financial institutions, and law enforcement agencies to successfully combat this pervasive crime and prevent the concealment, possession, acquisition, or use of proceeds of crime in the financial system.

FAQ:

Q: What is a continuing offence in the context of money laundering?

A: A continuing offence in money laundering refers to the ongoing nature of criminal activities related to the proceeds of crime, such as their concealment, possession, acquisition, or use, which continue to occur even after the initial laundering activities have been completed.

 

Q: How has the Prevention of Money Laundering Act (PMLA) evolved over time?

A: The PMLA has evolved through various amendments and court judgments that have contributed to the development of the concept of continuing offences, with the most significant change being the 2019 amendment, which expanded the scope of continuing offences in money laundering cases.

 

Q: What was the impact of the 2019 amendments to the PMLA on continuing offences?

A: The 2019 amendments added Explanation (ii) to Section 3 of the PMLA, which established that the offence of money laundering would continue until the person involved derives benefits from the tainted property. This broadened the scope of money laundering as a continuing offence and allowed the government to target even those offences committed before the introduction of the PMLA or the inclusion of predicate offences in the list of scheduled offences.

 

Q: What role do court judgments play in shaping the concept of continuing offences in money laundering cases?

A: Court judgments have played a crucial role in interpreting and clarifying the provisions of the PMLA, thus shaping the concept of continuing offences. These judgments have emphasized the ongoing nature of money laundering activities and have helped define the scope and applicability of the PMLA in various situations.

 

Q: Why is understanding the concept of continuing offences important in money laundering cases?

A: Understanding the concept of continuing offences is essential for legal practitioners, regulators, and law enforcement agencies, as it allows them to effectively combat money laundering by addressing the ongoing nature of criminal activities related to the proceeds of crime and ensuring that individuals who continue to benefit from illicit funds remain within the purview of the law.

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If you found this article helpful, you may be interested in Advocate Vijay Pal Dalmia, along with Advocate Siddharth Dalmia‘s book, “A Guide to the Law of Money Laundering”. This comprehensive guide provides even more in-depth information on how to recognize and prevent money laundering. It’s packed with practical tips and advice for staying one step ahead of financial criminals. Get your copy today at here.

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By

Vijay Pal Dalmia, Advocate

Supreme Court of India & Delhi High Court

Email id: vpdalmia@gmail.com

Mobile No.: +91 9810081079

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This will shed light on the intricacies of the Prevention of Money Laundering Act 2002 and its implications for combating money laundering offences in India.

Be sure to check back regularly for new insights and updates on this complex and ever-evolving area of law.

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