Prevention of Money Laundering Act, 2002
The Power of Survey: Section 16
A survey is the lightest of the PMLA's investigative powers. It lets an authority enter a place where money laundering is believed to be carried on, to inspect records, verify proceeds of crime, and record statements, without the full apparatus of a search. It is modelled on the survey power in the Income-tax Act. This note sets out its conditions, what the officer may and may not do, and how it differs from a search.
A survey seen as a floor plan: what the officer may do in each part of the premises, the pre-conditions, and survey against search
1. The Provision and Its Conditions
§ Section 16(1), in substance Where an authority, on the basis of material in his possession, has reason to believe, the reasons to be recorded in writing, that an offence under Section 3 has been committed, he may enter any place within the area assigned to him, or for which he is authorised by the authority assigned that area, at which any act constituting the commission of the offence is carried on. He may require any proprietor, employee or other person attending to or helping in that act to: (i) afford the facility to inspect records available there; (ii) afford the facility to check or verify the proceeds of crime or related transactions found there; and (iii) furnish information useful for or relevant to proceedings under the Act. |
2. What the Officer May Do
Power | The position |
|---|---|
Entry into the place | The place where the act constituting the offence is carried on; including any building, place, vessel, vehicle or aircraft within the meaning given |
Inspection of records | Records available at the place, as the officer requires |
Verification of proceeds | Checking or verifying proceeds of crime and related transactions found there |
Marks and copies | Placing identification marks on records inspected; making or causing extracts or copies |
Inventory | Making an inventory of property checked or verified |
Recording statements | Recording the statement of any person present, which may be useful for or relevant to proceedings |
Impounding records | Records are ordinarily inspected, marked and copied; where retention is needed, it must be justified under the Act's provisions, and where evidence is at risk, a search under s. 17(3) may follow |
3. Safeguards
i. Reason to believe, recorded in writing, on material in possession, before the survey.
ii. Limited place: only where the act constituting the offence is carried on.
iii. Sealed envelope: immediately after the survey, a copy of the reasons and the material are forwarded to the Adjudicating Authority under Section 16(2).
4. Survey and Search Compared
Basis | Survey, s. 16 | Search, s. 17 |
|---|---|---|
Purpose | Inspect and verify | Find and seize |
Who | An authority under the Act, within its area | Authorised by the Director or a Deputy Director and above |
Place | Where the act is carried on | Any building, place, vessel, vehicle or aircraft |
Break locks | No | Yes |
Seize property | No general power | Yes |
Freeze | No | Yes, s. 17(1A) |
Statements | Recorded from persons present | Examination on oath |
Link | Evidence at risk may lead to search under s. 17(3) | Follows independently or after a survey |
5. Frequently Asked Questions
What is a survey under the PMLA?
Entry into a place where money laundering is believed to be carried on, to inspect records, verify proceeds of crime and related transactions, and obtain information, under Section 16.
What must precede a survey?
Reason to believe, on material in possession and recorded in writing, that an offence under Section 3 has been committed.
How does a survey differ from a search?
A survey inspects and verifies at the place of business; a search under Section 17 may be of any place, may break locks, and seizes or freezes property.