Expansion of Reporting Entities under Anti-Money Laundering Law
The Indian government has recently expanded the list of reporting entities under the Prevention of Money Laundering Act (PMLA)
Who's Included in the Expanded List ?
The expanded list now includes nominee directors, nominee shareholders, partners, and providers of office accommodation without a proper contract meeting certain criteria
Zero-Tolerance Stance
Experts say these modifications signal the authorities' zero-tolerance stance on issues of money laundering.
Increased Accountability
Certain transactions by accountants and company secretaries have been placed under PMLA, increasing their accountability and liability
Expanded Definition
The law defines reporting entities as banks, financial institutions, and others. This definition has been expanded to include more roles
Implications of the Expansion
By widening the scope of PMLA, the government aims to instill a sense of fear in wrongdoers, deterring money laundering activities
Exclusions from the Order
The order clarified that any agreement of lease, sub-lease, tenancy or any other agreement for the use of land, building or space is not included in this
Clarification on Professional Obligations
The order also clarifies the application of PMLA to the certification given by advocates, accountants and company secretaries at the time of registration of a company.
The Impact of the Notification
The net effect of this notification is that providing a declaration will not make it an obligation for the professional to maintain a record or to report such a transaction.