Centre tweaks anti-money laundering law, role of CAs, CS, cost accountants now under PMLA

The Centre also made it mandatory for crypto exchanges and intermediaries dealing with virtual digital assets to do KYC of their clients and users of the platform. News18.

The country’s chartered and cost accountants as well as company secretaries have been brought under the anti-money laundering law for five specified financial transactions, including buying and selling of any properties and management of bank accounts, undertaken on behalf of their clients, the Centre announced recently.

The five broad categories of financial transactions listed in the notification are buying and selling of immovable property; managing of client money, securities or other assets; management of bank, savings or securities accounts; organisation of contributions for the creation, operation or management of companies; and creation, operation or management of companies, limited liability partnerships or trusts, and buying and selling of business entities.

The Finance Ministry issued a notification making the changes last week which stated that the relevant sections of the Prevention of Money Laundering Act, 2002, or PMLA, will apply to all client transactions done by any CA, CS and CWA.

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Reacting to the changes brought in by the Centre, the Institute of Chartered Accountants of India (ICAI) said chartered accountants have now become reporting entities for the purposes of these specified transactions. “As a reporting entity they have to do KYC of all clients entering into above transactions and maintain record thereof,” ICAI said in a statement.

The institution also added that it will conduct an awareness programme for its members in connection with such financial transactions which are already prohibited on behalf of one’s client, in the course of their daily work.

“ICAI will also continue to work with the authorities and other regulators so that these changes are implemented in the right perspective and role of professionals is understood,” the statement read.

The BJP-led Centre in recent months has undertaken a number of measures to tighten the provisions of the anti-money laundering law — Prevention of Money Laundering Act, 2002 — to check the circulation of black money in the country.

Earlier in March, the Finance Ministry had amended a few rules under the PMLA making it mandatory for banks and financial institutions to record financial transactions of politically exposed persons (PEP), news agency PTI had reported.

Financial institutions or reporting agencies were also given the task of collecting information about the financial transactions of non-profit organisations or NGOs under the PMLA.

The Centre also made it mandatory for crypto exchanges and intermediaries dealing with virtual digital assets to do KYC of their clients and users of the platform. It notified that entities dealing in virtual digital assets would be only a ‘reporting entity’ under the PMLA.

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