The Prevention of Money-laundering Act, 2002, and the rules and FIU-IND guidance under it, impose a programme — not a poster — on reporting entities. Banks are the familiar case. Jewellers, real-estate intermediaries, certain payment operators, and specified professionals doing specified activities have been brought in by notification over time. The first professional question is whether the person is a reporting entity at all.
The core duties
- Client identification and verification — KYC that is current, not a photocopy taken in 2014.
- Beneficial-ownership identification, especially for companies, firms and trusts.
- Ongoing due diligence, not only onboarding.
- Record-keeping for the prescribed period.
- Reporting of prescribed transactions and of suspicious transactions to FIU-IND, in the time allowed.
- An internal policy, a designated director / principal officer, and training that can be evidenced.
What a CA is usually asked to do
To write or review the policy, to sample KYC files, to see whether beneficial owners of company clients have actually been identified, and — on an audit — to test whether the programme operates. This is not a certification that no money-laundering has occurred. It is an examination of a control system.
See AML / CFT and who is a reporting entity.