India: Offence Of Cross- Border Implications Under PMLA

Last Updated: 19 June 2019
Article by Vijay Pal Dalmia, Partner and Satyam Sharma

By Vijay Pal Dalmia, Advocate
Supreme Court of India & Delhi High Court
Mobile: +919810081079
Twitter: @vpdalmia
AND -Satyam Sharma, Symbiosis Law School, Pune\
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The offence of cross-border implications has been defined u/s 2(1)(ra) of The Prevention of Money Laundering Act, 2002 (hereinafter, PMLA). The difference that needs to be understood before dwelling into the issue of cross-border implications is 'whether S. 2(1)(ra) of PMLA deals with the offence of cross-border implications' or 'whether the offence of money laundering has cross-border implications'. S. 2(1)(ra) deals with the latter and provides two instances when the offence of money laundering defined u/s 3 of PMLA would have cross-border implications. S. 2(1)(ra) of PMLA states that:

(ra) "Offence of cross border implications", means—

  1. any conduct by a person at a place outside India which constitutes an offence at that place and which would have constituted an offence specified in Part A, Part B or Part C of the Schedule, had it been committed in India and if such person transfers in any manner the proceeds of such conduct or part thereof to India; or
  2. any offence specified in Part A, Part B or Part C of the Schedule which has been committed in India and the proceeds of crime, or part thereof have been transferred to a place outside India or any attempt has been made to transfer the proceeds of crime, or part thereof from India to a place outside India.

The two instances mainly pertain to the transfer of the proceeds of crime 'to India' or 'from India to a place outside India' or an attempt is made in regards to the latter. This provision on its own doesn't constitute an offence but supplements the offence of money laundering and increases its applicability to cross-border transactions as well. Anyone who is found guilty u/s 2(1)(ra) of PMLA would be held guilty u/s 3 and would be punishable for the offence of PMLA u/s 4 of the Act.

S.2(1)(ra) and Part C of the schedule attached to PMLA were inserted in the PMLA Act by an amendment in 2009 to add a new category of offences having cross border implications. A subsequent amendment in 2012 gave birth to an anomaly pertaining to whether an offence under Part B of the schedule has cross border implications or not. Part B and Part C of the schedule attached to PMLA have been produced under:



Section Description of offence
132 False declaration, false documents, etc.]


An offence which is the offence of cross border implications and is specified in,

  1. Part A; or
  2. [***]
  3. The offences against property under Chapter XVII of the Indian Penal Code.]
  4. The offence of willful attempt to evade any tax, penalty or interest referred to in section 51 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.]

While S. 2(1)(ra) of PMLA defines the offence of cross border implications, Part C of the schedule lists out offences having cross border implications. The inconsistency arises due to Part B being present in the definition under S. 2(1)(ra) but having been omitted under Part C of the schedule via the 2012 Amendment. The Judicial interpretation in this respect seems to be limited as far as offences under Part B of the schedule having cross border implications goes. It still remains ambiguous as to whether an offence under Part B would be dictated by S. 2(1)(ra) of the act or Part C of the schedule to determine whether it would have any cross border repercussions or not. Part B of the Schedule was last amended in the year 2015, by virtue of which the offence under Section 132 of the Customs Act was included.

It is a well settled principle that when there are two special acts dealing with the same subject matter, the legislation which has been enacted subsequently should prevail.1 Where the provisions of the later enactment are inconsistent with those of the earlier, the later by implication amends the earlier so far as is necessary to remove the inconsistency between them.2 Implementing the same logic to three amendments i.e. in the years 2009, 2012 and 2015, of the same act, the omission of Part B from Part C by the 2012 amendment will not prevail over its inclusion in the definition clause u/s 2(1)(ra) by the 2009 amendment as Part B was again amended in the year 2015. As such, the inconsistency because of exclusion of Part B from Part C has to be ignored and S. 2(1)(ra) has to prevail. Therefore as mentioned u/s 2(1)(ra) of PMLA the offence of cross border implications would also be applicable to offences specified under Part B of the schedule attached to PMLA.


1. Allahabad Bank v. Canara Bank, (2000) 4 SCC 406; In Re: Adoption of Payal @ Sharinee Vinay Pathak and his wife Sonika Sahay @ Pathak, 2010 (1) BomCR 434.

2. Bennion on Statutory Interpretation (5th ed., 2008) ' 80: Implied amendment.

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