Finance Ministry amends the Prevention of Money-laundering (Maintenance of Records) Rules, 2005; effective 13/02/2019

Finance Ministry amends the Prevention of Money-laundering (Maintenance of Records) Rules, 2005; effective 13/02/2019

March 6, 2019 Industries, OPS, states 0

The Ministry of Finance, Department of Revenue (“Ministry”) has notified the Prevention of Money-laundering (Maintenance of Records) Amendment Rules, 2019 (“Amendment”), which has amended the Prevention of Money laundering (Maintenance of Records) Rules, 2005 (“Rules”) with effect from 13th February 2019.

Background:

The Amendment seeks to make certain changes to the Rules in order to bring it in line with the recent Aadhaar Judgment at the Supreme Court of India.

Key Highlights;

  • The definition of Aadhaar Number has been amended to make a direct inference from the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016 (18 of 2016) (“Aadhaar Act”).
  • Possession of Aadhaar is now considered an officially valid document under the Rules.
  • While applying for any subsidy or benefit under the Aadhaar Act, reporting entities now need to mandatorily blackout the Aadhaar number of the client in processes where Aadhaar number is not required for carrying out due diligence.
  • While doing due diligence on an individual, reporting entities now require Aadhar Number only when the individual is interesting in availing any benefit or subsidy under the Aadhaar Act.
  • The kinds of documents that reporting entities require while performing due diligence on Companies, Partnership Firms, Trusts and unincorporated association or a body of individuals has been revised. They now need to submit the following documents:

o    FOR COMPANIES:

  • Certificate of incorporation;
  • Memorandum and Articles of Association;
  • Permanent Account Number of the company;
  • A resolution from the Board of Directors and power of attorney granted to its managers, officers or employees, as the case may be, to transact on its behalf;
  • One copy of an officially valid document containing details of identity and address, one recent photograph and Permanent Account Numbers or Form No.60 of the managers, officers or employees, as the case may be, holding an attorney to transact on the company’s behalf.

o    FOR PARTNERSHIP FIRMS:

  • Registration certificate;
  • Partnership deed;
  • Permanent Account Number of the partnership firm; and
  • One copy of an officially valid document containing details of identity and address, one recent photograph and Permanent Account Number or Form No.60 of the person holding an attorney to transact on its behalf.

o    FOR TRUST:

  • Registration certificate;
  • Trust deed;
  • Permanent Account Number or Form No.60 of the trust; and
  • One copy of an officially valid document containing details of identity and address, one recent photograph and Permanent Account Number or Form No.60 of the person holding an attorney to transact on its behalf.

o    FOR UNINCORPORATED ASSOCIATION OR A BODY OF INDIVIDUALS:

  • Resolution of the managing body of such association or body of individuals;
  • Permanent account number or Form No.60 of the unincorporated association or a body of individuals;
  • Power of attorney granted to him to transact on its behalf;
  • One copy of an officially valid document containing details of his identity and address, one recent photograph and Permanent Account Number or Form No.60 of the person holding an attorney to transact on its behalf; and
  • Such information as may be required by the reporting entity to collectively establish the existence of such association or body of individuals.

Source: Ministry of Finance, Department of Revenue

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