New Rules To Investigate International Transactions Worth More Than Rs 50,000

By Consultants Review Team Thursday, 19 October 2023

In an effort to prevent terror financing, the government amended the Prevention of Money Laundering (Maintenance of Records) Rules, 2005. The change intends to improve record-keeping for overseas transactions worth more than Rs 50,000.

According to the new guidelines, a reporting organization must identify clients for any foreign transaction above Rs 50,000 and determine the objective of the business if it is not adequately defined.

The amendment also requires reporting organizations that are part of a group to implement anti-money laundering and anti-terror funding procedures. They should also share information needed for client due diligence and put in place "adequate safeguards" to ensure the confidentiality and use of information exchanged to avoid tipping-off that could jeopardize existing 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," according to the amendment.

It stated that the reporting body must evaluate if a client is working on behalf of a beneficial owner, identify the beneficial owner, and take all means to verify the beneficial owner's identity using trustworthy and independent sources of identification.


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