With reference to the trail e-mail, the Ministry of Finance (“Ministry”) has issued the Prevention of Money-laundering (Maintenance of Records) Second Amendment Rules, 2023 to further amend the Prevention of Money-laundering (Maintenance of Records) Rules, 2005 (“Principal Rules”) with immediate effect.
The following are the key Highlights under the Amendment:
- The Second Amendment Rules have amended the definition of “Principal Officer” referred to in Rule 2(f) by inserting a proviso that such officer will be an officer at the management level.
- The provision related to the determination of “Beneficial Owner” under Rule 9(3)(b) has been amended. Previously, the ‘Beneficial Owner’ for the purpose of doing client due diligence was the natural person having an ownership of or entitlement to more than 15% of the capital or profits of the partnership. Now, the said minimum ownership/entitlement has been reduced from 15% to 10%. Further, the beneficial owner will include not only the partners who have ownership of more than 10% of the capital or profits of the partnership but also those partners who exercise control through other means. It is also explained that the ‘Control’ will include the right to control the management or policy decision.
- While verifying the identity of a client being ‘trust’ carrying out transactions exceeding 50,000 Rupees, the reporting entity has to ensure that trustees disclose their status at the time of commencement of an account-based relationship or when carrying out transactions as specified in clause (b) of sub-rule (1) rule 9.
- The expression ‘records of the identity of clients’ under Rule 10 (Maintenance of the records of the identity of clients) will also include ‘result of any analysis undertaken under rule 3 (Maintenance of records of transactions) and rule 9 (Client Due Diligence)’ in addition to updated records of the identification date, account files and business correspondence.
For a detailed read, please refer to the hyperlink below.
Source: Ministry of Finance
