New norms to scrutinise international transactions above Rs 50,000

financialexpress.com:

In a bid to combat terror financing, the government has introduced an amendment to the Prevention of Money-laundering (Maintenance of Records) Rules, 2005. The amendment aims to enhance record-keeping in case of international transactions exceeding Rs 50,000.

Under the new rules, a reporting entity will have to identify clients for every international transaction above Rs 50,000, and ascertain the purpose of the business if not well defined.

The amendment also mandates reporting entities, that are part of a group, to implement measures against money laundering and terror financing. They should also share information required for the purposes of client due diligence, and shall establish “adequate safeguards” to ensure confidentiality and use of information exchanged to prevent tipping-off that may compromise ongoing investigations.

“Every reporting entity shall…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, and its ownership and control,” the amendment said.

The reporting entity shall determine whether a client is acting on behalf of a beneficial owner, and identify the beneficial owner and take all steps to verify the identity of the beneficial owner, using reliable and independent sources of identification, it said.