Government critics fear India’s revised anti-money-laundering laws may be used against them


A decision by India’s Supreme Court to uphold the powers of the country’s financial crime investigation agency has drawn flak, with legal experts concerned that the authorities can continue to detain suspects without bail on weak evidence.

It has also stoked fears that critics of the government, including the opposition, may be targeted under amended laws.

The Supreme Court on July 27 dismissed more than 100 petitions against amendments to The Prevention of Money Laundering Act, including some made by Prime Minister Narendra Modi’s government in 2019.

One controversial provision effectively presumes the guilt of persons accused of money laundering. Another gives the Enforcement Directorate (ED) powers to arrest people and seize assets without judicial oversight.

The amended laws also make it virtually impossible for arrested persons to get bail, as they will now have to prove their innocence even before their trial.

Confessions made to ED officers in an inquiry can now be used against the accused, an extraordinary power that even the Indian police does not have.

PM Modi’s Bharatiya Janata Party (BJP) government claims the amendments were necessary to strengthen the ED’s ability to investigate serious financial crimes.

Law Minister Kiren Rijiju said the ruling had “made it amply clear that agencies do not do anything that is illegal and unconstitutional”.

But law professor Upendra Baxi of the University of Warwick wrote in The Indian Express that prosecuting the “serious crime” of money laundering cannot “relieve states of the responsibility of fair trial and of complying with due process, justice and human rights in the administration of criminal justice”.

PM Modi’s government has used the law and the ED, which operates under the Ministry of Finance, more vigorously than its predecessors.

Between 2004 and 2014, when the Congress party was in power, the ED carried out 112 searches, according to an official response in Parliament.

That number rose to more than 3,000 between 2014 and 2022, under PM Modi’s government. Nearly 1,200 of these were filed in the last financial year till March 31, 2022.

Nearly half the money-laundering cases since the law came into force in 2005 were filed in the past five years, according to official data presented in court.

The government insists that the ED is fighting corruption and financial crimes, but opposition leaders claim that the government uses the agency selectively to its own political ends, especially in states

ruled by parties other than the BJP.

The ED is currently investigating politicians from at least nine opposition parties.

Last year, the agency provided the Supreme Court with a list of 122 parliamentarians and legislators, including BJP politicians, who were facing charges, but this information has not been made public.

The ED has also accused several government critics of money laundering, including human rights non-profit Amnesty International India, columnist Rana Ayyub and activist Harsh Mander.

Companies facing the ED’s charges include Chinese phonemakers Xiaomi and Vivo for tax evasion, Indian construction giant GVK for transactions regarding the Mumbai airport, and Yes Bank over kickbacks in land transfers.



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