Sec. 2 (1) (ra) of the Prevention of Money Laundering Act, 2002 (http://fiuindia.gov.in/pmlasection2.htm ), answers the question regarding the applicability of the Prevention of Money Laundering Act, 2002 (PMLA) on a Foreign Subsidiary of an Indian company.

Sec. 2 (1) (ra) of the PMLA, while defining the “offence of cross border implications”, answers the question above, as—

  • any conduct by a person
  • at a place outside India
  • which constitutes an offence at that place outside India,

AND

  • which would have constituted an offence specified in Part A, Part B or Part C of the Schedule of PMLA,
  • had it been committed in India,

AND

  • if such person
  • transfers in any manner
    • the proceeds of such conduct or part thereof to India;

OR

any offence specified in Part A, Part B or Part C of the Schedule of PMLA

  • which has been committed in India,

AND

  • the proceeds of crime, or part thereof
  • have been transferred to a place outside India,

OR

  • any attempt has been made to
  • transfer the proceeds of crime, or part thereof
  • from India 
  • to a place outside India.

So, PMLA would be applicable on a subsidiary of an Indian Co., located at overseas jurisdiction, provided the ingredients of the above offence related to cross border transaction are applicable.