Finance ministry brings chartered accountants and company secretaries within ambit of PMLA

Finance ministry brings chartered accountants and company secretaries within ambit of PMLA

It assumes significance ahead of India’s proposed assessment under the Financial Action Task Force

Notifying the changes to the Prevention of Money Laundering Act (PMLA), 2002, the Ministry of Finance has brought in practicing chartered accountants, company secretaries, and cost and works accountants carrying financial transactions on behalf of their clients, under the money laundering law.

In its recent notification, the ministry stated that the activity would be recognized under PMLA if such professionals carried out financial transactions on behalf of their clients. The activities include buying and selling an immovable property; managing client money, securities, or other assets; management of bank, savings, or securities accounts; organizing contributions for the creation, operation, or management of companies; limited liability partnerships or trusts, and buying and selling of business entities.

Even though the range has been widened, for now, the lawyers have been kept out of it.

The changes to the PMLA have been made in the sub-clause (vi) of clause (sa) of sub-section (1) of section 2, which defines different categories of persons covered under the money laundering law.

The amendments assume significance ahead of India’s proposed assessment under the Financial Action Task Force (FATF), expected to be undertaken later this year.

FATF is a global money laundering and terrorist financing watchdog. India’s possible onsite assessment is slated for November, while the assessment is likely to come up for discussion in the plenary discussion in June 2024.