The PMLA was enacted in 2002 and has been amended several times since then to combat money laundering, terrorism financing, and other related crimes. It requires reporting entities, including banks, financial institutions, and intermediaries, to identify and report suspicious transactions to the Financial Intelligence Unit - India (FIU-IND). By adding CAs, CSs, and CWAs to the ambit of reporting entities, the government aims to increase the accountability and transparency of these professionals.
Any person or entity found guilty of money laundering can face up to seven years in jail or a fine of up to INR 5 crore. The government has now expanded the definition of a 'reporting entity' to include all practicing professionals who fall under the purview of their respective regulatory bodies. For example, CAs registered with the Institute of Chartered Accountants of India; CSs registered with the Institute of Company Secretaries of India; and CWAs registered with the Institute of Cost Accountants of India.
The government has issued a notification to the Institute of Chartered Accountants of India (ICAI), the Institute of Company Secretaries of India (ICSI), and the Institute of Cost Accountants of India (ICMAI) defining the activities that these professionals must report to the FIU-IND under the PMLA. These activities include:
- Opening of a bank account, fixed deposit, or locker
- Sale or purchase of immovable property
- Purchase or sale of a motor vehicle
- The receipt or payment of cash above the prescribed limit
- Credit card and debit card transactions above a certain limit
- Fund transfers
- Receipt or issue of shares, securities or derivatives
- Transaction or series of transactions that appear to be suspicious
The reporting entities must maintain a record of all transactions undertaken by them on behalf of their clients and report any suspicious transactions to the FIU-IND within a prescribed time limit. Failure to do so can result in penalties and other disciplinary action.
In conclusion, the inclusion of CAs, CSs, and CWAs as reporting entities under the PMLA is a positive step towards enhancing the accountability and transparency of these professionals. The move will also help in detecting and preventing money laundering and other related crimes. It is essential for these professionals to adhere to the guidelines specified by their respective regulatory bodies and comply with the PMLA reporting requirements to avoid any penalties and disciplinary action.
Keywords: CAS, PMLA, reporting entity, anti-money laundering, suspicious transaction, accountability, transparency, government, financial intelligence unit.