CA, CS & CMA brought under PMLA net if they manage client assets

Government notifies that following transactions done by CA, CS & CMA on behalf of their client will be covered under Prevention of Money-laundering Act, 2002.

This notification is issued by the Ministry of Finance, Department of Revenue in India, and it pertains to the Prevention of Money Laundering Act, 2002. The notification outlines that certain financial transactions carried out by a relevant person on behalf of their client shall be considered as an activity under sub-section (1) of section 2 of the Act.

Also Read: Practicing Professionals are Now Under PMLA Ambit

The financial transactions that are covered by this notification include buying and selling of immovable property, managing client money, securities, or other assets, managing bank, savings, or securities accounts, organization of contributions for the creation, operation, or management of companies, and creation, operation, or management of companies, limited liability partnerships, or trusts, and buying and selling of business entities.

The explanation 1 of this notification defines a relevant person, which includes an individual who obtained a certificate of practice under section 6 of the Chartered Accountants Act, 1949, an individual who obtained a certificate of practice under section 6 of the Company Secretaries Act, 1980, and an individual who has obtained a certificate of practice under section 6 of the Cost and Works Accountants Act, 1959, and who is practicing individually or through a firm.

Explanation 2 of the notification defines the term “firm” as per sub-clause (i) of clause (23) of section 2 of the Income-tax Act, 1961.

In summary, this notification specifies the types of financial transactions that shall be considered as an activity under sub-section (1) of section 2 of the Prevention of Money Laundering Act, 2002, and outlines the definition of relevant persons and firms in this context.

MINISTRY OF FINANCE
(Department of Revenue)
NOTIFICATION
New Delhi, the 3rd May, 2023

S.O. 2036(E).In exercise of the powers conferred by sub-clause (vi) of clause (sa) of sub-section (1) of section 2 of the Prevention of Money-laundering Act, 2002 (15 of 2003), the Central Government hereby notifies that the financial transactions carried out by a relevant person on behalf of his client, in the course of his or her profession, in relation to the following activities-

(i) buying and selling of any immovable property;

(ii) managing of client money, securities or other assets;

(iii) management of bank, savings or securities accounts;

(iv) organisation of contributions for the creation, operation or management of companies;

(v) creation, operation or management of companies, limited liability partnerships or trusts, and buying
and selling of business entities,

shall be an activity for the purposes of said sub-section.

Explanation 1.- For the purposes of this notification ‘relevant person’ includes – –

(i) an individual who obtained a certificate of practice under section 6 of the Chartered Accountants Act, 1949 (38 of 1949) and practicing individually or through a firm, in whatever manner it has been constituted;

(ii) an individual who obtained a certificate of practice under section 6 of the Company Secretaries Act, 1980 (56 of 1980) and practicing individually or through a firm, in whatever manner it has been constituted;

(iii) an individual who has obtained a certificate of practice under section 6 of the Cost and Works Accountants Act, 1959 (23 of 1959) and practicing individually or through a firm, in whatever manner it has been constituted.

Explanation 2.- For the purposes of this notification ‘firm’ shall have the same meaning assigned to it in sub-clause (i) of clause (23) of section 2 of the Income-tax Act, 1961 (43 of 1961).

[F. No. P-12011/12/2022-ES Cell-DOR]
SHASHANK MISRA, Director (Headquarter)