The finance ministry has tightened the anti-money laundering rules by bringing in partners holding 10 per cent stake in a firm, as against 15 per cent earlier, under the definition of beneficial owners. The ministry has amended the Prevention of Money-laundering (Maintenance of Records) Rules, 2005, which also provides for management-level functionary as ‘Principal Officer’ responsible for providing information to the financial intelligence unit.
The amendment also said that in the case of a trust, the reporting entity shall ensure that trustees disclose their status at the time of commencement of an account-based relationship or when carrying out specified transactions.
The government has in recent months tightened various anti-money laundering provisions ahead of assessment by the global watchdog on terror financing and money laundering Financial Action Task Force (FATF).
The agency is scheduled to conduct an assessment of the implementation of anti-money laundering and counter-terror financing standards in India later this year.
In May, the Finance Ministry had notified changes in PMLA provisions which made chartered and cost accountants and company secretaries liable under the anti-money laundering law for carrying out certain specified financial transactions on behalf of their clients.
These transactions include buying and selling of any properties and management of bank accounts.
In March, the PMLA rules were amended making it mandatory for banks and financial institutions to record financial transactions of politically exposed persons (PEP).
Also, financial institutions or reporting agencies were mandated to collect information about the financial transactions of the non-profit organisations or NGOs under the PMLA.
The government also made it mandatory for crypto exchanges and intermediaries dealing with virtual digital assets to do KYC (Know Your Customer) for their clients and users of the platform.
