When we talk about the Prevention of Money Laundering Act, 2002 (PMLA), we often think of freezing bank accounts, seizing properties or seizing luxury vehicles. But in a recent and quite unique case, the seizure of over three dozen horses worth around Rs 4 crores, under the PMLA provisions, made headlines and sparked conversations about the evolving nature of asset seizures in investigations into financial crimes.


This case not only highlights the idiosyncrasies of luxury assets but also underlines the flexibility of legal frameworks such as the PMLA in addressing the challenges of money laundering in India.


The context: how horses came under PMLA’s radar


The seizure of horses as ‘proceeds of crime’ under the PMLA came during an investigation into a high-profile case that was part of a money laundering probe into an international cyber fraud case in West Bengal where foreign citizens were duped through fake call centers who provided false technical information. support, fake loans through counterfeit apps, etc. The suspect is said to have laundered money in various ways, including investments in exotic and valuable assets. This included racehorses, which were either purchased directly with illicit funds or maintained and trained with the proceeds of criminal activity, with their racing profits further invested in the money laundering cycle, making them a potential storehouse of laundered money.


Legal framework: the scope of the PMLA


The PMLA authorizes authorities to seize, confiscate or confiscate property or assets derived from criminal proceeds. Article 5 of the law allows provisional seizure of such assets if there is reason to believe that they are related to a planned offense. Horses, like other movable assets, fall within the broad scope of ‘property’ as defined in Section 2(1)(v) of the Act. Under such seizure of animals, the ED imposes restrictions on their sale and once the interim order is confirmed by the Adjudicating Authority of the PMLA, they can be auctioned and the funds obtained from such sale will be kept in the public treasury or refunded to the victims of these animals. the financial fraud.


The seizure of horses is therefore a reminder of how expansive the definition of ‘property’ is under the PMLA. Whether it’s luxury cars, jewelry, real estate or animals, the


The law is equipped to tackle any asset that serves as a conduit for money laundering.


Challenges in securing horses under the PMLA


The attachment to horses points to the broader issue of unique legal, operational and ethical challenges arising from the nature of such movable and living assets.


The first legal challenge authorities must overcome is that the horses were purchased or maintained with the proceeds of crime. Establishing this connection can be complex, especially if the financial process is opaque or complicated.


Second, determining the market value of high-end racehorses can be subjective and require expertise in evaluating factors such as pedigree, racing history and training. Incorrect valuations can lead to disputes or legal challenges.


Third, unlike other possessions, once attached, horses will require daily care, including food, medical care and training. The well-being of the animals during the bonding period is paramount. Authorities may not have the expertise or facilities to care for such animals. This raises concerns about their ability to ensure humane treatment while the animals are under state custody. The Enforcement Directorate (ED) or other authorities may face logistical hurdles in detaining these animals during ongoing investigations. Neglect during the bonding process can lead to ethical violations and animal welfare concerns.


Fourth, it will be crucial that clear ownership of the horses is established. Horses can be owned jointly or registered under different names, making it challenging to link them directly to the suspect.


And finally, movable property such as horses can be difficult to manage and secure as evidence during ongoing investigations. Ensuring that they remain in their original state is critical to their admissibility in court.


Global context: parallels and precedents


The use of luxury assets such as horses in financial crime is not unprecedented. There have been cases worldwide where exotic animals and other valuables have been seized as part of money laundering investigations:



As enforcement of the PMLA evolves, this case will likely set a new precedent. It highlights the idiosyncrasies of luxury assets and underlines the flexibility of legal frameworks such as the PMLA. It confirms that all forms of assets, conventional or unconventional, fall within the purview of anti-money laundering laws in India. For policymakers, this is an opportunity to refine frameworks that address the operational and ethical complexities of the seizure of movable and living assets. For enforcement agencies, it is an opportunity to develop specialized expertise in dealing with niche assets, while maintaining compliance with international standards.


(The author is a lawyer practicing at the Supreme Court of India)


Views are personal.



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