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Verification Of Identity

Every reporting entity shall at the time of commencement of an account-based relationship, identify its clients, verify their identity and obtain information on the purpose and intended nature of the business relationship. In all other cases, identity should be verified while carrying out—

        (i) transaction of an amount equal to or exceeding rupees fifty thousand, whether conducted as a         single transaction or several transactions that appear to be connected, or
        (ii) any international money transfer operations.

Relevant provision of Rule 9 of the Prevention of Money-laundering (Maintenance of Records) Rules, 2005 is reproduced as under:

9. Client Due Diligence.—

(1) Every reporting entity shall—
(a) at the time of commencement of an account-based relationship—
(i) identify its clients, verify their identity, obtain information on the purpose and intended nature of the business relationship; and
(ii) determine whether a client is acting on behalf of a beneficial owner, and identify the beneficial owner and take all steps to verify the identity of the beneficial owner:

Provided that where the Regulator is of the view that money laundering and terrorist financing risks are effectively managed and where this is essential not to interrupt the normal conduct of business, the Regulator may permit the reporting entity to complete the verification as soon as reasonably practicable following the establishment of the relationship; and
(b) in all other cases, verify identity while carrying out—
(i) transaction of an amount equal to or exceeding rupees fifty thousand, whether conducted as a single transaction or several transactions that appear to be connected, or
(ii) any international money transfer operations.
(2) For the purpose of clause (a) of sub-rule (1), a reporting entity may rely on a third party subject to the conditions that—
(a) the reporting entity immediately obtains necessary information of such client due diligence carried out by the third party;
(b) the reporting entity takes adequate steps to satisfy itself that copies of identification data and other relevant documentation relating to the client due diligence requirements will be made available from the third party upon request without delay;
(c) the reporting entity is satisfied that such third party is regulated, supervised or monitored for, and has measures in place for compliance with client due diligence and record-keeping requirements in line with the requirements and obligations under the Act;
(d) the third party is not based in a country or jurisdiction assessed as high risk;
(e) the reporting entity is ultimately responsible for client due diligence and undertaking enhanced due diligence measures, as applicable; and
(f) where a reporting entity relies on a third party that is part of the same financial group, the Regulator may issue guidelines to consider any relaxation in the conditions (a) to (d).
(3) The beneficial owner for the purpose of sub-rule (1) shall be determined as under—
(a) where the client is a company, the beneficial owner is the natural person(s), who, whether acting alone or together, or through one or more juridical person, has a controlling ownership interest or who exercises control through other means.
Explanation.—For the purpose of this sub-clause—
1. "Controlling ownership interest" means ownership of or entitlement to more than twenty-five per cent. of shares or capital or profits of the company;
2. "Control" shall include the right to appoint majority of the directors or to control the management or policy decisions including by virtue of their shareholding or management rights or shareholders agreements or voting agreements;
(b) where the client is a partnership firm, the beneficial owner is the natural person(s) who, whether acting alone or together, or through one or more juridical person, has ownership of/entitlement to more than fifteen per cent. of capital or profits of the partnership;
(c) where the client is an unincorporated association or body of individuals, the beneficial owner is the natural person(s), who, whether acting alone or together, or through one or more juridical person, has ownership of or entitlement to more than fifteen per cent. of the property or capital or profits of such association or body of individuals;
(d) where no natural person is identified under (a) or (b) or (c) above, the beneficial owner is the relevant natural person who holds the position of senior managing official;
(e) where the client is a trust, the identification of beneficial owner(s) shall include identification of the author of the trust, the trustee, the beneficiaries with fifteen per cent. or more interest in the trust and any other natural person exercising ultimate effective control over the trust through a chain of control or ownership; and
(f) where the client or the owner of the controlling interest is a company listed on a stock exchange, or is a subsidiary of such a company, it is not necessary to identify and verify the identity of any shareholder or beneficial owner of such companies.

 
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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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