The Indian government has implemented a new amendment to the Prevention of Money-laundering (Maintenance of Records) Rules, 2005, in an effort to enhance record-keeping for international transactions exceeding Rs 50,000. The move aims to combat terror financing by subjecting such transactions to closer scrutiny, according to an ET report.
Under the amended rules, reporting entities must now diligently identify their clients, verify their identities, and ascertain the purpose of the business if it is not clearly defined. This additional measure will ensure that international transactions above Rs 50,000 undergo thorough examination
Furthermore, the latest amendment also mandates reporting entities, particularly those that are part of a group, to establish adequate safeguards to protect the confidentiality and use of exchanged information. These safeguards are crucial in preventing any tipping-off that could potentially compromise ongoing investigations.
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According to the official notification, every reporting entity is required to “identify its clients, verify their identity using reliable and independent sources of identification, obtain information on the purpose and intended nature of the business relationship, where applicable, and take reasonable steps to understand the nature of the customer’s business, as well as its ownership and control.”
Additionally, reporting entities must determine whether a client is acting on behalf of a beneficial owner and take the necessary steps to identify and verify the beneficial owner’s identity using reliable and independent sources of identification.
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The new amendment is part of the Indian government’s ongoing efforts to strengthen anti-money laundering measures and prevent the flow of funds towards terrorist activities. By tightening record-keeping requirements for international transactions, authorities aim to minimize the risk of terror financing and ensure the country’s financial system remains secure.
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