The Ministry of Finance has issued a notification dated March 07, 2023 (“Notification”), classifying entities that engage in specific activities (see below) related to Virtual Digital Assets (“VDA(s)”) in the course of business, as “persons carrying on designated business or profession” Therefore, such entities are now considered “Reporting Entities” under the Prevention of Money Laundering Act, 2002 and the corresponding rules (“PMLA”). VDAs are defined as any “information or code or number or token” that is not currency and is generated through “cryptographic means or otherwise”. The defini ..read more

  The Serious Fraud Investigation Office (‘SFIO’) is an organisation established under the aegis of the Ministry of Corporate Affairs (‘MCA’) – for investigation and prosecution of white-collar crimes. The SFIO was constituted in July 2003 following the recommendations of the Naresh Chandra Committee. In 2002, the Naresh Chandra Committee had recommended setting up a ‘Corporate Serious Fraud Office’, to uncover corporate fraud, and supervise prosecutions under various economic legislations. The Naresh Chandra Committee had also suggested that the organisation responsible for detecting an ..read more

The Prevention of Money Laundering Act, 2002 (‘PMLA’) has undergone multiple amendments after it was brought into operation on July 1, 2005. Most recently, the PMLA was amended through the – Finance Act, 2015 (‘2015 Amendment’) Finance Act, 2018 (‘2018 Amendment’) Finance Act, 2019 (‘2019 Amendment’) These amendments aimed to plug loopholes in the operation of the PMLA – to strengthen the framework for tackling money laundering. In furtherance of this objective, the 2019 Amendment has clarified the definition of “proceeds of crime” under Section 2(1)(u). Amendments were also made to Section ..read more

Corporate scandals and frauds in India are as old as the hills. The 1950s witnessed the infamous LIC/ Mundhra scam, which was the first major financial fraud of the independent India. Frauds continued with an alarming regularity thereafter in every decade – the infamous Harshad Mehta, Ketan Parekh, Sahara, and Satyam scams are just a few of them. These frauds were investigated by the law enforcement agencies under the relevant provisions of the Indian Penal Code, 1860 (IPC). The Companies Act, 1956 did not have any separate definition of ‘fraud’. Legally, it was not necessary to have a separa ..read more

Introduction The growth and diversification of businesses have led to an increase in white collar crimes. The term ‘white collar crime’ was first defined by Edwin Hardin Sutherland as crimes committed by persons who hold high societal status and repute in their profession. As the complexity of such crimes has grown over the years and investigations have become refined, we have seen an increase in private professional services offering support to companies and their management in dealing with white collar crimes. These support services extend from providing an in-depth analysis of the crime to ..read more

The Finance Act, 2019 (the 2019 Act) is the Central Government’s endeavour to tighten the gaps around the existing provisions of the Prevention of Money Laundering Act, 2002 (PMLA). Amidst the growing number of financial crimes and high-profile cases, the 2019 Act attempts to make the existing provisions stricter and better armoured to detect suspicious transactions. Additionally, the Act, along with the other amendments, has a greater aim of targeting money laundering and terrorist financing. The 2019 Act attempts to remove the ambiguity in the existing provisions by amending eight clauses o ..read more

Part I of the article elaborates on legal basis and purpose extradition, the procedure and the statutory provisions of Indian Extradition Act, 1962 as well as the key aspects of the extradition treaty between India and the UK. Here we will discuss the extradition treaties between India and the US, India and UAE. This post further elaborates on the practice of non-extradition of own nationals and various issues that may be faced by States whilst processing a request for extradition. Extradition Treaty Between India & the United States (US) The offence is extraditable if punishable under t ..read more

  Under International law, extradition[i] is a formal, diplomatic process by which one state requests another to effect the return of custody of a fugitive criminal[ii] for crimes punishable by the laws of the requesting State and committed outside the jurisdiction of the country where such person has taken refuge. International extradition[iii] is an obligation undertaken by States in good faith to promote and execute justice[iv]. The first formal act providing for extradition was adopted in 1833 by Belgium, which also passed the first law on the right to asylum. Extradition Acts not only sp ..read more

  Criminal liability encompasses two elements: actus reus (guilty act) and mens rea (guilty mind). There is no dispute that a company is liable to be prosecuted for criminal offences. However, the company being an artificial person cannot have the requisite mens rea, hence the question whether a company could be prosecuted for an offence for which the mandatory sentence is imprisonment. The law has evolved from the position that a company cannot be prosecuted for offences that require imposition of a mandatory imprisonment[1], to the position that the mens rea of the ‘alter ego’ of the compan ..read more

The past few years have seen a marked increase in regulatory investigations and enforcement action into fraud. This increased scrutiny brings into focus the liability of the individuals involved in the fraud and the extent to which such individuals are liable. Typically, when the company has committed fraud, persons who are responsible for the actions of the company – the ‘directing mind and will– are held liable. In contrast, where a fraud is committed on the company and/or its shareholders, it involves identifying both, the officers at whose behest, or for whose benefit, such actions were u ..read more