Are Payment Gateways ‘reporting entities’ under PMLA
Should a word or a phrase defined similarly in two different statutes be interpreted differently? Hon’ble Delhi High Court has answered this interesting and impor...
Introduction
Should a word or a phrase defined similarly in two different statutes be interpreted differently? Hon’ble Delhi High Court has answered this interesting and important legal issue this week in its judgement dated JUly 24, 2023 in case of PayPal Payments Pvt. Ltd. (‘PayPal’) Vs. Financial Intelligence Unit India & Anr. [W.P. (C ) 138/2021]. The ratio and detailed rationale provided in the judgement is likely to have wide implications on existing payment gateways and other payment intermediaries (indicatively).
The Prevention of Money Laundering Act, 2002 (PMLA) read with Prevention of Money Laundering (Maintenance of Records) Rules, 2005 (“2005 Rules”) prescribe certain reporting, record keeping and compliance obligations on ‘reporting entities’ which are defined under Section 2(1)(wa) of the PMLA.
“The same phrase may be interpreted differently across statutes when legislative intent and statutory purpose differ.”
