Govt. amends PML (Maintenance of Records) Rules, 2005, to ensure strict compliance by Reporting Enti

The third amendment to Prevention of Money-laundering (Maintenance of Records) Rules, 2005, makes reporting obligations more stringent for all reporting entities. This necessitates use of reliable and independent sources of identification by reporting entities while carrying out client due diligence. Further, it makes it mandatory for the reporting entities, which are part of group, to implement group-wide programmes against money laundering and terror financing, including group-wide policies for sharing information required for the purposes of client due diligence and money laundering and terror finance risk management. Such programmes are required to include adequate safeguards on the confidentiality and use of information exchanged, including safeguards to prevent tipping-off.

Interestingly, the amendment has done away with the time limit of seven days within which the principal officer of a reporting entity, on being satisfied that the transaction is suspicious, was required to furnish the information promptly with the Director FIU. Further, the amendment obligates the reporting entity, its Directors, officers, and all employees to maintain confidentiality in respect of maintenance of records and furnishing of information with Director, FIU.

The reporting entity is now required to conduct client due diligence at the time of commencement of an account-based relationship or while carrying out occasional transaction of an amount equal to or exceeding rupees fifty thousand, whether conducted as a single transaction or several transactions that appear to be connected, or any international money transfer operations.

(G.S.R. 745(E) dated 17th October, 2023 issued by Department of Revenue, Ministry of Finance)