Applicability of the Prevention of Money Laundering Act, 2002 (PMLA) on a Foreign Subsidiary of an Indian Company

Sec. 2 (1) (ra) of the Prevention of Money Laundering Act, 2002 (http://fiuindia.gov.in/pmla-section2.htm ), answers the question regarding the applicability of the Prevention of Money Laundering Act, 2002 (PMLA) on a Foreign Subsidiary of an Indian company.
 
Sec. 2 (1) (ra) of the PMLA, while defining the “offence of cross border implications”, answers the question above, as— 
 
·         any conduct by a person
 
·         at a place outside India
 
·         which constitutes an offence at that place outside India,
 
AND
 
  ·         which would have constituted an offence specified in Part A, Part B or Part C of theSchedule of PMLA,
 
·         had it been committed in India,AND
 
·         if such person
 
·         transfers in any manner
 
o   of the proceeds of such conduct or part thereof to India;
 
OR
 
 any offence specified in Part A, Part B or Part C of the Schedule of PMLA
 
 ·         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.
 
So, PMLA would be applicable on a subsidiary of an Indian Co., located at overseas jurisdiction, and provided the ingredients of the above offence related to cross border transaction are applicable.
Connect With Us Social Media