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Client Identification and Risk Assessment Programme
Relevant portion of Rule 9 of the Prevention of Money-laundering (Maintenance of Records) Rules, 2005 lays is reproduced as under:

(11) No reporting entity shall allow the opening of or keep any anonymous account or account in fictitious names or account on behalf of other persons whose identity has not been disclosed or cannot be verified.
(12)

  • Every reporting entity shall exercise ongoing due diligence with respect to the business relationship with every client and closely examine the transactions in order to ensure that they are consistent with their knowledge of the client, his business and risk profile and where necessary, the source of funds.
  • When there are suspicions of money laundering or financing of the activities relating to terrorism or where there are doubts about the adequacy or veracity of previously obtained client identification data, the reporting entity shall review the due diligence measures including verifying again the identity of the client and obtaining information on the purpose and intended nature of the business relationship, as the case may be.
  • The reporting entity shall apply client due diligence measures also to existing clients on the basis of materiality and risk, and conduct due diligence on such existing relationships at appropriate times or as may be specified by the regulator, taking into account whether and when client due diligence measures have previously been undertaken and the adequacy of data obtained.

(13)

  • Every reporting entity shall carry out risk assessment to identify, assess and take effective measures to mitigate its money laundering and terrorist financing risk for clients, countries or geographic areas, and products, services, transactions or delivery channels that is consistent with any national risk assessment conducted by a body or authority duly notified by the Central Government.
  • The risk assessment mentioned in clause (i) shall—
    (a) be documented;
    (b) consider all the relevant risk factors before determining the level of overall risk and the appropriate level and type of mitigation to be applied;
    (c) be kept up to date; and
    (d) be available to competent authorities and self-regulating bodies.

(14)

  • The regulator shall issue guidelines incorporating the requirements of sub-rules (1) to (13) above and may prescribe enhanced or simplified measures to verify the client’s identity taking into consideration the type of client, business relationship, nature and value of transactions based on the overall money laundering and terrorist financing risks involved.
    Explanation.—For the purpose of this clause, simplified measures are not acceptable whenever there is a suspicion of money laundering or terrorist financing, or where specific higher-risk scenarios apply or where the risk identified is not consistent with the national risk assessment.
  • Every reporting entity shall formulate and implement a Client Due Diligence Programme, incorporating the requirements of sub-rules (1) to (13) and guidelines issued under clause (i) above.
  • the Client Due Diligence Programme shall include policies, controls and procedures, approved by the senior management, to enable the reporting entity to manage and mitigate the risk that have been identified either by the reporting entity or through national risk assessment.

 
whats new

 
NDPS Act, 1985

UAPA, 1967

The Prevention of Money Laundering (Amendment) Act, 2012 (Scanned Format)

The Prevention of Money Laundering (Amendment) Act, 2009 (Scanned Format)

The Prevention of Money Laundering (Amendment) Act, 2005 (Scanned Format)

The Prevention of Money Laundering Act, 2002 (Scanned Format)

WARNING

FIU-India does not seek any information from individuals. If any person receives any such letter/query, it is a fraud and it should be immediately reported to the Police and also brought to the notice of FIU-IND...more
 
 
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