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SHRI E.M. SUDARSANA NATCHIAPPAN (SIVAGANGA): Mr. Chairman, Sir, the Bill before the House is a very important legislation. As we are entering into the 21st Century and a very wide field of having global trade and other things, I feel that we are having a very sincere and famous Finance Minister, but I do not think that this Bill has a clear idea of the path which it wants to take. I think that the Finance Minister could not go through it fully, because it was prepared keeping in mind the UN Resolution alone. So, it is not a comprehensive Bill which will threaten the foreign investors when they come to our country. Even though the Bill will be passed, since we are supporting it, I would request the Finance Minister that he should along with the Home Minister, Law Minister and External Affairs Minister and formulate a better legislation which would also be very simple.

Then, the number of white collar crimes has increased in our country. So, we have to have a clear, simple and concise Bill to prevent these crimes. If we compare the two Bills which are before the House, there is a lot of repetition. Instead of having two Bills, we can have only one Bill which is very comprehensive and useful. So, I would request the hon. Finance Minister to have a separate focussing on these types of crimes.

The Indian Penal Code is very clearly defined, unlike this Bill. But the Indian Penal Code is now used only for tackling the law and order problems in the States, because it is a State subject. We have a subject here, under this Bill, which is very wide and which goes beyond the States and beyond the country also. Therefore, we should have a separate enforcement authority, just like the Central Bureau of Investigation, for preventing the white collar crimes. There should be a Central Economic Police Department. Management of foreign exchange is not required. The nomenclature of the Bill itself is a misnomer. There is nothing to manage here; there should only be policing. It is required to catch the culprits, book them, put them behind the bars and confiscate the properties which they have acquired through their illegal activities.

That cannot be management. It can be policing. There should be separate policing which should be finding out who actually are committing the crime. They should be very watchful and find out that in our territory, there should not be any crime committed in these ways. Therefore, if that type of machinery is created, then, that will be giving more confidence to the law-abiding people so that they can be very clear in their minds that if they were law-abiding, then they are protected. If anything happens beyond the law, then, they will be punished. That type of circumstances have to be created. That environment has to be created in this new era. Therefore, I request the hon. Minister of Finance to concentrate on creating a separate agency which should be policing because we find in the Act that it is having both the the executive and the judicial powers in one hand. That should be separated like that in the Directive Principles of State Policy in the Constitution.

Now, when we are going for a law, that should have clarity to say that a machinery which is looking after the management of the economy can be a prosecutor but cannot be a judge for it. Now, regarding the powers of the Assistant Director or below that rank, it is giving the powers to create a case or to be a prosecutor. At the same time, they are also sitting as judges. That bifurcation should be there. They can be prosecutors but the judge should be somebody else. The court should be there. Special courts, which are created for the purpose of economic offences to cover up these types of laws alone should be created. There should be full-time judges and not judges who are retired or who are retired civil servants or something like that. That should not be there.

When you are having a verdict in a criminal court, then, it catches the eyes of all the people. But when there is a verdict by the Assistant Director or the Deputy Director, it cannot catch the eyes of the people. It cannot prohibit further occurrence of such offences. Therefore, it should be a separate entity. Judiciary should be separated and full-time judges should be appointed. When there is an appellate side also, full-time judges should be appointed. Unless that type of thing is created, there will not be a fear of law. Inside the administration, just like a Revenue Board, they are also not worried about it. They are getting an order. Then, they are quashing it by way of some other proceedings. Therefore, there should be separation of executive and judiciary. This is a very important legislation and needs particular attention of the Ministry of Finance. Therefore, I will request the Minister of Finance to make that arrangement.

In the meantime, I would also like to submit that when we go through the law, especially the definition made for money laundering, in section 3, it is not very clear what property he acquires, owns, possesses or transfers any proceeds of the crime. Where is the crime committed? Suppose the crime is committed in a foreign country and property is acquired here or suppose a crime is committed and property is acquired somewhere else and money is laundered, will it attract? When such types of reciprocal things are happening, this particular section will not attract that type of thing?

In the same way, there are many things which are not directly focussing or pinpointing that these are the offences punishable. That type of specification is not there and throughout the code, only the description of the authority and the powers of the authority and procedures are laid down. If both the Bills are taken up together, then it can be very simple and, at the same time, it will be a comprehensive Bill.

As one of our hon. Members told, when the Criminal Procedure Code is allowed to be followed, it is very easy to make a law instead of giving procedures. How it has to be searched or how it has to be supervised or surveyed are the things. Every definition is very weak. It is also not very clear when we compare it with search under the Criminal Procedure Code.

It is not a clear one, if we compare it with search in the Criminal Procedure Code. When we are having a very good law of Criminal Procedure Code. Simply we can add it, just like in one section it is added the Criminal Procedure Code will be followed. In the same way we can make it that way also.

I would like to sum up my submission by saying that nowadays the cinemas and television are showing blackmarketing and foreign exchange violations done through the sea route. These activities are now taken up by the unemployed youth, especially the educated youth, to show their heroic approach. Therefore, if the statistics are gone through, we can see such types of offences committed in foreign countries. By doing so, they are amassing wealth and showing their wealth in this country. These types of things have to be looked into. And such cinemas should be prohibited.

We have to be preventive on the one side and there should be rehabilitation on the other side. Some people are unnecessarily involved and their families are totally razed. Such type of people should be taken care of. They should be rehabilitated. Their families are in the streets and they cannot find out how to bring them out, because they are used as tools in the hands of rich people, who are having a very good network throughout the world. In the Southern part of India, you can easily find, on every airport, people travelling with passports and getting something smuggled from outside, they are caught, and jailed. There is nobody to bother about them. In the same way many people in Singapore, Malaysia and Arabian countries could not be repatriated. They are living there and they are tortured there. In the Arabian

countries, arms and legs have been removed from the bodies of many people. Even though, they are Indian citizens but they could not get any relief. They could not come back and they are dying like anything.

Many things are happening throughout the world. Therefore, these poor people, who are going there for the sake of money and to earn their livelihood, get trapped in this. There are so many women employees also. They should also be protected. They are suffering a lot in Singapore, Malaysia and Arabian countries.

So, in toto, I would like to submit that the hon. Finance Minister should take an overall view, that is, preventive, actual policing and rehabilitation work. So, there is a Bill presented by the hon. Finance Minister, which should be a specimen for the world to be followed.

SHRI BIR SINGH MAHATO (PURULIA): Mr. Chairman Sir, the Money Laundering and FEMA, both the Bills come together and both of them are part of the liberalisation process.

Sir, it is a fact that Money Laundering is a threat to the financial system and it also destabilizes our society and it also destabilizes the integrity and sovereignty of our country. But through this Bill, I do not feel that black money can be controlled. The generation of black money is also a threat to our financial system. So, some stringent measures should be taken, but those have not been provided in this Bill.

Besides that, in the FEMA Bill, it is stated in the Statement of Objects and Reasons:

"... to facilitate the external trade and payment and for providing the orderly development and maintenance of foreign exchange markets in India, etc...."

But I think, this purpose will not be served.

The earlier FERA was to some extent stringent and there it was trial under the criminal procedure. Now, it has become trial under the civil procedure. It is a part of liberalization. Too much liberalization, I think, will not help our country. Some stringent action should be taken. So, on behalf of my Party, I oppose this Bill.

SHRI VARKALA RADHAKRISHNAN (CHIRAYINKIL): Mr. Chairman, Sir, now, the Prevention of Money Laundering Bill has been examined once before. I do not want to go into the details. There were suggestions made by the Standing Committee on the Prevention of Money Laundering Bill. We all know that money laundering is an offence having international dimensions. It is an off-shoot of an illicit traffic in narcotic substance and psychotropic substance. The United Nations had to deal with it and the Convention also provides that it should be made punishable and the proceeds should be recovered.

I do not oppose this Bill. I have to make some suggestions. Now the point is that the punishment that is to be awarded in money laundering should not be compromised. There should be no room for repetition of this offence. We may say that the punishment should be reformative but in the case of money laundering, the man who is committing this offence, this illicit transaction, may be minting money also. These persons are capable of even challenging the authority of the lawfully established Government. They have such a network throughout the nation and they can influence anybody. That is the position. I do not know whether the Finance Minister will succeed with this legislation. I am not sure about it. This legislation is only a first step. I am not sure whether he will be able to deal with money laundering with this piece of statute. It requires much more detailed provisions.

Now I would suggest one word that the Central Government had diluted the bail provisions. Why should that be? Now, you see, the small boys and girls are used as agents. Why should you release them on bail all of a sudden? They are the agents of the moneyed people. The real culprit will not come to the stage. They are directing behind the scene. All these transactions take place through the agents employed by the big people, rich people, who are the hoarders. The small boys and girls, innocent boys and girls below the age of 15 years or 16 years are being employed in these illicit transactions. If they are found guilty and they are arrested, why should you leave them so easily? We can send them to the reformative school. Let them be there. Why should you entrust them to somebody else on bail? The person who is behind the scene will take the responsibility of getting these boys released on bail. Why should you release them? Let them be in the reformative school. Let the man behind the scene come into the picture. So, the Central Government's action in not accepting our recommendation and diluting the bail provision is not at all good. Why should you make it bailable?

Suppose a person is sick, we will send him to hospital. Why should the bail provision be made so easy?

Even if the offender is a sick person and he is arrested, he should not be let off on bail. He may be sent for medical treatment if he is sick. But the bail provision need not be diluted.

Then take the case of female offenders. Why should you release them on bail so easily? Female persons are not meant for this purpose. They are acting as agents of the person who is behind her, who is directing the offender. So, the conclusion arrived at by the Central Government in diluting the bail provision is opposed. We want stringent provisions and we are for deterrent punishment, deterrent punishment in the sense that the offence should not be repeated. It is a challenge to our economy. It is a challenge to the Government as a whole. That is why, I take this opportunity to impress upon the Government to be stringent in the matter of money laundering.

I may say one more word. You have fixed the age limit of the Chairperson as 68 years. Why should such an old man be a Chairperson? He is 68 years old. I do not know whether the Government is having anybody in mind to accommodate him. But here it is given that in the case of Chairperson, he can serve up to the age of 68 years. Why should he be allowed to serve up to 68

years? The age limit of the Member is fixed as 65 years. Then you do this. You give him the age limit of 70 years or 75 years. If things go on like this, there will be no end to the matter. I can understand if the maximum age is 65 years.

SHRI RAMESH CHENNITHALA (MAVELIKARA): You are 65. That is why, you want that.

SHRI VARKALA RADHAKRISHNAN : No, I can understand the age limit of 65 years. Why should it be 68 years, especially, in a matter in which he will have to take some judicial decisions? The judicial mind will have to act. At the age of 68 years, the judicial mind need not act. For some persons, it may be possible but not in all cases. It is to accommodate the retired people. We need not always accommodate the retired people. So, I would request the hon. Finance Minister to reconsider this. Let us fix it at 65 years only. Even the age limit of the Chief Justice of the Supreme Court is 65 years only. Then why should the age limit of this person be fixed at 68 years? I do not understand the logic behind it. Please tell me the logic behind it. If I go on like this, there are many other Members who may lose their chance. So, due to lack of time, I do not want to go into the details.

I can understand the point with regard to the headquarters. But what about the sittings? Why do you not have the sittings in the Capital city of each State? Why do you not provide it in the Statute itself? You have mentioned here that somebody else has to be consulted and decision will have to be taken. That is a delaying process. We should make it abundantly clear that there will be regular sittings at least in three or four metropolitan Capitals. We must provide that in the Money Laundering Act. I am sure if things go on like this, the hon. Finance Minister will have to come again before this House with an amendment Bill for this. I am very definite about it. I am concluding my submission on the first Bill.

Let me come to the second Bill. Unfortunately, we do not get time. We are now replacing an Ordinance which was in force till 1973, till the Foreign Exchange Regulation Act was in force. We had a bitter experience. We know the inadequacies and also the flaws in that Bill.

Now our economic policy has changed; our outlook has changed and all our basic principles have been thrown to the winds. Now we are thinking of global economy, liberalization and all that. This Bill is brought to suit the changing conditions. I do not know how far he will succeed in his attempt. That is also another matter.

But when you bring a Bill, it must be conclusive. It must be of some definite purpose. I am sure with this piece of legislation the hon. Minister cannot reach that purpose because the machinery that is brought into existence is quite inadequate to meet the situation.

SHRI RAMESH CHENNITHALA : Sir, I would like to know whether you are extending the time of House. It is already 6.30 p.m. The time of the House was extended only for half-an-hour. You please tell us whether you are extending the time of the House further or not.

THE MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI V. DHANANJAYA KUMAR): He is the last speaker. Then, there will be reply.

SHRI RAMESH CHENNITHALA : Sir, you should extend the time of the House. That is my point. I have no objection.

SHRI V. DHANANJAYA KUMAR: That can be done with your concurrence.

SHRI RAMESH CHENNITHALA : Sir, you have to extend the time of the House.

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SOME HON. MEMBERS: Yes.

SHRI VARKALA RADHAKRISHNAN : The provisions contained in this Bill need drastic changes in regard to punishment. At present, it provides for punishment given to criminals. Now, under FERA, the offender will be sent to prison which is meant for criminals and the offence will be treated as a criminal offence. That is the basic thing. Now, as per FEMA, criminal element is taken away. (Interruptions). Management is another matter. If he is committing the offence and if he is an offender, then he will be sent to a civil prison which is meant for people other than criminals and which will be costly to the exchequer because the entire expense will have to be met by the State. He will be treated as `A' class prisoner with all the facilities. The Penal law of India provides for punishment for offences like cheating. But under the FEMA, it will be treated as offence other than a criminal offence.


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