Discover the recent amendments to India’s Prevention of Money Laundering Act (PMLA) expanding its scope to include professionals like Chartered Accountants, Company Secretaries, and Cost and Works Accountants. Learn about the implications, compliance requirements, and the government’s efforts to strengthen the legal framework against money laundering and financing of terrorism in India. Stay informed with our insights on the changes and their potential impact on professionals involved in critical financial transactions.
The government of India has recently amended the Prevention of Money Laundering Act (PMLA) through the Finance Act, 2021, to expand the scope of the Act and bring certain professionals under its ambit. The amendments were made in April 2021, and they have significant implications for professionals such as Chartered Accountants, Company Secretaries, and Cost and Works Accountants.
The key changes to the PMLA Act include expanding the definition of “proceeds of crime” to include any property that is involved in money laundering or is linked to any offence under the Act. The definition of “money laundering” has also been expanded to include activities such as concealment, acquisition, possession, or use of proceeds of crime.
In addition, the amendments have brought professionals such as Chartered Accountants, Company Secretaries, and Cost and Works Accountants under the ambit of the PMLA Act. These professionals are now required to comply with the Act’s provisions, including maintaining records of their clients’ identity and transactions, verifying the identity of their clients, and reporting any suspicious transactions to the authorities.
The professionals mentioned above have been defined as “Reporting Entities” under the Act. The definition of Reporting Entities includes individuals who have obtained a certificate of practice under the Chartered Accountants Act, 1949, the Company Secretaries Act, 1980, or the Cost and Works Accountants Act, 1959, and are practicing individually or through a firm.
The scope of activities that fall under the purview of the PMLA Act has also been expanded. The Act now covers activities such as buying and selling of immovable property, managing client money, securities, or other assets, managing bank, savings or securities accounts, organizing contributions for the creation, operation or management of companies, and buying and selling of business entities.
The amendments aim to strengthen the legal framework for tackling money laundering and financing of terrorism in India. By bringing professionals such as Chartered Accountants, Company Secretaries, and Cost and Works Accountants under the ambit of the PMLA Act, the government intends to enhance the compliance and reporting standards of these professionals, who are involved in critical financial transactions on behalf of their clients.
In conclusion, the recent amendments to the PMLA Act have expanded its scope and brought certain professionals under its ambit. The changes aim to strengthen the legal framework for tackling money laundering and financing of terrorism in India and enhance the compliance and reporting standards of professionals involved in financial transactions. It remains to be seen how the amendments will be implemented and whether they will achieve their intended objectives.
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