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Reinforced PMLA Regulations for Money Laundering Prevention



  Oct 21, 2023

Stricter Reporting Norms under PMLA: An Overview Money Laundering Rules Tightened


New Delhi: The government took a decisive step on Tuesday, reinforcing the regulations related to the Prevention of Money Laundering Act (PMLA).
 

The key amendments necessitate that:

1. Reporting entities must now ascertain the identity of their clients through dependable, independent identification sources.
 
2. They are required to gather information regarding the intended purpose and character of the business relationship.
 
3. Efforts must be made to comprehend the nature of the client's enterprise, including its ownership and control structure.
 
 
A Heightened Responsibility: Entities must determine if a client represents a beneficial owner, identify such owners, and take measures to validate their identity.
 
Significantly, the Finance Ministry, in 2023 September modified the definition of a 'beneficial owner'. A person with ownership exceeding 10% of a partnership's capital or profits now qualifies as a 'beneficial owner'. This threshold was previously set at 15%.
 

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