Offence of cross border implications
Also written Cross border offence
Under section 2(1)(ra) of the PMLA, conduct abroad that would be a scheduled offence in India with proceeds reaching India, or a scheduled offence in India whose proceeds are sent or attempted to be sent abroad.
In plain language
A crime does not stop at a border, and neither does its money.
The PMLA deals with that in one defined term. An offence of cross border implications is a scheduled offence with an international leg — either the crime happened abroad and its money came to India, or the crime happened in India and its money went, or was attempted to be sent, abroad.
The definition matters for two reasons. It lets Indian law reach laundering whose predicate crime was committed in another country. And it is the gateway to Part C of the Schedule — the part with no monetary threshold — which is why it appears in both Chapter 2 and Chapter 4 of this paper.
How it works
The two limbs — section 2(1)(ra).
| Limb | Where the conduct happens | What happens to the proceeds |
|---|---|---|
| (i) | Outside India — the conduct is an offence at that place and would have been an offence in Part A, B or C of the Schedule had it been committed in India | The proceeds, or part of them, come to India |
| (ii) | In India — an offence specified in Part A, B or C | The proceeds of crime, or part of them, have been transferred outside India, or any attempt has been made to transfer them |
The workbook's text of limb (i) drops a verb ("if such person the proceeds of such conduct or part thereof to India"), but the direction — proceeds into India — is clear.
Double criminality in limb (i). The foreign conduct must be an offence where it was committed and must mirror a Schedule offence in India. Conduct lawful abroad is not caught.
Attempt is enough in limb (ii). The money need not have left.
The Explanation. Nothing in the clause adversely affects any investigation, enquiry, trial or proceeding in respect of Part A or Part B offences before the commencement of the Prevention of Money-laundering (Amendment) Act, 2008.
Part C of the Schedule lists an offence which is the offence of cross border implications and is specified in Part A, the offences against property under Chapter XVII of the Indian Penal Code, and the wilful attempt to evade tax, penalty or interest under section 51 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. Under section 2(1)(y), Part C offences are scheduled offences with no value threshold — unlike Part B, which requires one crore rupees or more.
International cooperation. Section 56 lets the Central Government enter agreements with foreign governments for enforcing the Act and exchanging information on offences under it or under the corresponding law of that country.
A worked example
Illustrative scenarios built on the workbook's definition. The Paytm facts are from Chapter 7.
Limb (ii), from the workbook. In the Paytm Payments Bank matter, businesses in India organised online gambling and fraudulent services; the proceeds were routed through Indian accounts and subsequently remitted abroad. An offence committed in India with proceeds transferred outside India is the shape of limb (ii).
Limb (i). A trading company in Country X defrauds investors there of USD 4 million — cheating is an offence in Country X and would be a Part A offence in India. USD 1.5 million of it is sent to a subsidiary's account with an IFSC Banking Unit in GIFT City. The conduct was abroad, it is an offence there, it would be a Schedule offence here, and proceeds have come to India: an offence of cross border implications.
Limb (ii), attempt only. An Indian customs fraud generates proceeds and the accused instructs a wire of USD 600,000 from an IFSC unit to Dubai. The IFSC bank's name screening and monitoring stop the payment before it leaves. The attempt to transfer proceeds abroad is enough; the fact that nothing moved does not take it outside the definition.
The contrast. A businessman in Country Y does something lawful in Country Y that would be an offence in India and brings the profits to GIFT City. Limb (i) requires the conduct to be an offence at that place, so it is not an offence of cross border implications on these facts.
Why NISM asks about it
Chapter 2 (Prevention of Money Laundering Act, 2002) carries section 2(1)(ra) among the definitions and section 56 on agreements with foreign countries; Chapter 4 (Scheduled Offences) uses it to define Part C. Given how international the IFSC's business is, expect a question on the two limbs — especially that an attempt to transfer proceeds abroad is enough — and on Part C having no monetary threshold.
Common exam traps
- Two directions. Crime abroad with proceeds into India, or crime in India with proceeds out (or attempted out).
- Limb (i) needs double criminality — an offence where committed and a Schedule offence had it happened in India.
- An attempt to transfer is enough under limb (ii).
- Part C has no value threshold; Part B needs Rs 1 crore or more. A Part B-type offence with cross-border implications should not be answered with the Part B threshold without reading Part C.
- The 2008 Amendment Act saving protects earlier proceedings on Part A and Part B offences — it does not retrospectively apply the definition.
- It is still a scheduled offence, so proceeds of crime must be generated for a PMLA case.
Check yourself
1.Offences under the Bharatiya Nyaya Sanhita (BNS) 2023 are covered under which part of the scheduled offences?
- a)Part A of the Schedule
- b)Part B of the Schedule
- c)Part C of the Schedule
- d)All of the above
Show the answer
Answer: (a) Part A of the Schedule
Paragraph 1 of Part A: Offences Under the Indian Penal Code (45 of 1860) and under Bharatiya Nyaya Sanhita (BNS) 2023 (45 of 2023).
Part A, the first paragraph — and Part A is introduced as covering the Bharatiya Nyaya Sanhita (BNS) 2023 (erstwhile Indian Penal Code 1860) among other statutes, for which no monetary threshold has been provided.
Option B names the wrong Part. Part B also encompasses offences under Indian tax laws, such as the Customs Act 1962, for which a monetary threshold of 3 million rupees or 10 million rupees has been prescribed — and it contains a single entry, section 132, false declaration, false documents, etc.
Option C describes the cross-border Part. Part C of the PMLA specifies that any offence mentioned under Part A, particularly offences with cross-border implications, falls within the purview of the Act.
Note the qualification in option D's direction. A BNS offence could reach Part C if it has cross-border implications — Part C covers an offence which is the offence of cross border implications and is specified in... Part A and also the offences against property under Chapter XVII of the Indian Penal Code. But BNS offences as such are listed in Part A.
Why the Schedule lists two columns. The BNS has replaced the IPC and renumbered throughout, so each entry gives both — 120 B / 61(2) Criminal conspiracy, 302 / 103(1) Murder, 420 / 318(4) Cheating and dishonesty inducing delivery of properties, 467 / 338 Forgery of a valuable security, will, etc., 471 / 340(2) Using as genuine a forged document or electronic record, and 489A / 178 Counterfeiting currency notes or bank notes.
Learn the pairs, since a question may supply either number.
2.The Customs Act, 1962 appears in the Schedule twice. How?
- a)Section 135, evasion of duty or prohibitions, in Part A paragraph 12 with no threshold; and section 132, false declaration and false documents, as the sole entry in Part B where a threshold applies
- b)Both sections in Part B, both with thresholds
- c)Both sections in Part A, neither with a threshold
- d)Section 132 in Part A and section 135 in Part C
Show the answer
Answer: (a) Section 135, evasion of duty or prohibitions, in Part A paragraph 12 with no threshold; and section 132, false declaration and false documents, as the sole entry in Part B where a threshold applies
Paragraph 12 of Part A — The Customs Act, 1962 (52 of 1962): 135 — Evasion of duty or prohibitions.
PART B — OFFENCE UNDER THE CUSTOMS ACT, 1962: 132 — False declaration, false documents, etc.
Two sections of one statute, in two different Parts.
And that placement decides whether a threshold applies. Part A offences are those for which no monetary threshold has been provided, whereas Part B also encompasses offences under Indian tax laws, such as the Customs Act 1962, for which a monetary threshold of 3 million rupees or 10 million rupees has been prescribed as may be applicable.
**Section 2(1)(y) puts it as the offences specified under Part B of the Schedule if the total value involved in such offences is one crore rupees or more.
So a section 135 evasion of any value can found a money laundering prosecution, while a section 132 false declaration must clear the threshold — which is why options B and C are both wrong.
Option D reverses the sections and misplaces one in Part C. Part C covers an offence which is the offence of cross border implications specified in Part A, the offences against property under Chapter XVII of the Indian Penal Code, and the Black Money Act limb — it does not list Customs Act sections independently.
Why customs offences matter in this syllabus. Chapter 1 defines trade-based money laundering as disguising the proceeds of crime and moving value through the use of trade transactions, achieved through the misrepresentation of the price, quantity or quality of imports or exports — misrepresentations that are customs offences in themselves.
And Part B is the only Part with a single entry, which makes it easy to remember and easy to mistake for the whole of the customs treatment.
Note also that customs is named among the parallel investigators: agencies like IFSCA, SEBI, CBI, customs, and police may be involved for parallel investigation of predicate (scheduled) offences.
3.What does Part C of the Schedule cover?
- a)Only tax offences above one crore rupees
- b)Offences of cross-border implications specified in Part A, offences against property under Chapter XVII of the IPC, and wilful attempts to evade tax, penalty or interest under section 51 of the Black Money Act, 2015 — with no monetary threshold
- c)Only offences committed entirely outside India
- d)Offences under the Companies Act, 2013 alone
Show the answer
Answer: (b) Offences of cross-border implications specified in Part A, offences against property under Chapter XVII of the IPC, and wilful attempts to evade tax, penalty or interest under section 51 of the Black Money Act, 2015 — with no monetary threshold
An offence which is the offence of cross border implications and is specified in, — (1) Part A; or (3) the offences against property under Chapter XVII of the Indian Penal Code. (4) The offence of the wilful attempt to evade any tax, penalty or interest referred to in section 51 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.
Three limbs. (The workbook's numbering runs (1), (3), (4) — it is not consecutive in the source.)
And no threshold: Part C is a Part for which no monetary threshold has been provided, which disposes of option A. The one crore figure belongs to Part B.
Option C misreads "cross border implications". Section 2(1)(ra) defines it in two directions: conduct abroad that would have constituted an offence specified in Part A, Part B or Part C of the Schedule, had it been committed in India where the proceeds come to India; or a scheduled offence committed in India whose proceeds of crime, or part thereof have been transferred to a place outside India or any attempt has been made to transfer them.
So an offence committed wholly in India can be a Part C offence if its proceeds move — or someone attempts to move them — abroad. An attempt suffices.
Option D names one paragraph of Part A. The Companies Act, 2013, section 447, Punishment for fraud, is paragraph 29 of Part A.
Why Part C matters most in an IFSC. These centres exist for cross-border business — financial centres that cater to customers outside their own jurisdiction... deal with the flow of finance and financial products/services across borders — so the cross-border limb is the likeliest to arise.
And it connects to section 56 of the Act, under which the Central Government may make agreements with foreign governments for exchange of information for the prevention of any offence under this Act or under the corresponding law in force in that country, and to FIU-IND's function of sharing with foreign Financial Intelligence Units.
Where this is taught
Free preparation for NISM Series IFSCA-01Related terms
- Directorate of EnforcementThe multi-disciplinary agency that investigates the offence of money laundering and foreign exchange violations, enforcing the PMLA, FEMA, the Fugitive Economic Offenders Act and sponsoring COFEPOSA cases.
- Money launderingTurning the proceeds of a crime into money that looks legitimate — classically in three stages, placement, layering and integration — and a standalone offence under section 3 of the PMLA.
- Proceeds of crimeUnder section 2(1)(u) of the PMLA, any property derived or obtained, directly or indirectly, from criminal activity relating to a scheduled offence — or its value, or equivalent property where it is held abroad.
- Scheduled offenceAn offence listed in Part A, Part B or Part C of the Schedule to the PMLA — the crime that must have been committed before there can be proceeds of crime, and so before money laundering exists.
- Wire TransferAny transaction carried out for an originator through a financial institution by electronic means to make funds available to a beneficiary at a beneficiary institution — even if originator and beneficiary are the same.
- Predicate offenceThe underlying crime that generates the proceeds a launderer then has to hide — the critical element without which there is no money laundering offence at all.