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TMI BlogMaster Circular on Memorandum of Instructions governing money changing activitiesX X X X Extracts X X X X X X X X Extracts X X X X ..... of existing FFMCs : SECTION V Operational Instructions SECTION VI KYC/ AML/ CFT Guidelines SECTION VII Revocation of Licence SECTION VIII 'Fit and proper' criteria for directors of FFMCs / non-bank ADs Category - II Annex-I KYC / AML / CFT Guidelines for money changing activities Annex-II Application Form for FFMC licence under section 10(1) of FEMA, 1999 Annex-III Form RMC-F Annex-IV FLM 1 Annex-V FLM 2 Annex-VI FLM 3 Annex-VII FLM 4 Annex-VIII FLM 5 Annex-IX FLM 6 Annex-X FLM 7 Annex- XI FLM 8 Annex- XII Statement of Purchase transactions of USD 10,000 and above Annex- XIII Statement showing summation of Foreign Currency Account opened in India out of export proceeds of Foreign Currency Notes/ encashed Travellers' Cheques Annex- XIV Statement of the amount of foreign currency written off during the financial year Appendix SECTION-I Guidelines for Licencing and other Approvals for Authorised Money Changers (AMCs) 1. Introduction Authorised Money Changers (AMCs) are entities, authorised by the Reserve Bank under Section 10 of the Foreign Exchange Management Act, 1999. An AMC is a Full Fledged Money Changer (FFMC). In addition to Authorised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial companies as also the book value of debentures, bonds, outstanding loans and advances made to and deposits with its subsidiaries and companies in the same group in excess of 10 per cent of the Owned funds. (ii) Documentation Application in the form, as at Annex - II, should be submitted to the respective Regional Office of the Foreign Exchange Department of the Reserve Bank under whose jurisdiction the registered office of the applicant falls, along with the following documents: * Copy each of the Certificate of Incorporation and Certificate of Commencement of Business of the company. * Memorandum and Articles of Association containing a provision for undertaking money changing business or an appropriate amendment to this effect filed with the Company Law Board. * Copy of the latest audited accounts with a certificate from the Statutory Auditors certifying the Net Owned Funds as on the date of application. Copies of the audited Balance Sheet and Profit & Loss Account of the company for the last three years, wherever applicable. * Confidential Report from the applicant's banker in a sealed cover. * A declaration to the effect that no proceedings have been initiated b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld carry out their activities as per the instructions specified in SECTIONS V and VI below and other instructions issued by the Reserve Bank from time to time. [Note:- Urban Cooperative Banks (UCBs), fulfilling the eligibility norms, would be considered for authorization as Authorised Dealer Category-I / Authorised Dealer Category-II only] SECTION II Guidelines for Grant of Authorisation for Additional Branches:- 1. No FFMC shall carry on money changing business at any additional place of business other than its permanent place of business except with the prior approval of the Reserve Bank. An FFMC which intends to commence money changing business at any additional place of business shall apply in writing to the respective Regional Office of the Foreign Exchange Department under whose jurisdiction the registered office of the applicant falls and the Reserve Bank may approve the additional place of business subject to such conditions as deem fit. It is expected that branches of Authorised Persons should be diversified and should be meeting the demand of tourists,etc. Preference will be given to applications for branches in remote areas of tourist attraction. 2. Applications for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... * Foreign Exchange Counters in the departure halls in international airports in India shall be established only before the Customs Desk or the immigration desk, whichever comes first. Putting up suitable display at these counters, reminding the passengers that the area is the last point for non-residents to possess Indian Rupees (INR) may be followed up with the Airport Authorities. 5. The FFMC should commence operations of its additional branch within a period of six months from the date of issuance of licence and inform the Regional Office concerned of the Reserve Bank. SECTION III Guidelines for appointment of Agents / Franchisees by Authorized Dealer Category - I Banks, Authorized Dealers Category - II and FFMCs :- 1. Under the Scheme, the Reserve Bank permits AD Category - I Banks, ADs Category - II and FFMCs to enter into [franchisee (also referred as agency)] agreements at their option for the purpose of carrying on Restricted Money Changing business i.e. conversion of foreign currency notes, coins or travellers' cheques into Indian Rupees. 2. Franchisee A franchisee can be any entity which has a place of business and a minimum Net Owned Funds of Rs.10 lakh. Franchis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... restricted money changing activities will be conducted. * conduct certificate of the franchisee from the local police authorities. (certified copy of Memorandum and Articles of Association and Certificate of Incorporation in respect of incorporated entities). Note: Obtaining of Conduct Certificate of the franchisee from the local police authorities is optional for the franchisers. However, the franchisers may take due care to avoid appointing individuals/ entities as franchisees who have cases / proceedings initiated / pending against them by any law enforcing agencies. * declaration regarding past criminal case, if any, cases initiated / pending against the franchisee or its directors / partners by any law enforcing agency, if any. * PAN Card of the franchisee and its directors / partners. * photographs of the directors / partners and the key persons of franchisee. The above checks should be done on a regular basis, at least once in a year. The AD Category - I Banks / ADs Category - II / FFMCs should obtain from the franchisees proper documentary evidence confirming the location of the franchisees in addition to personal visits to the site. The AD Category -I Banks / AD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... will be issued to any FFMC / non-bank AD Category - II, against whom any major DoE / DRI / CBI / Police case is pending. In case where any FFMC / non-bank AD Category - II has received one-time approval for appointing franchisees and subsequent to the date of approval, any DoE / DRI / CBI / Police case is filed, the FFMC / non-bank AD Category - II should not appoint any further franchisees and bring the matter to the notice of the Reserve Bank immediately. A decision will be taken by the Reserve Bank regarding allowing the FFMC / non-bank AD Category - II to appoint franchisees. SECTION IV Guidelines for Renewal of licences of existing FFMCs: 1. The applicant should be a company registered under the Companies Act, 1956 having registered office within the area of jurisdiction of the respective Regional Office of the Foreign Exchange Department. 2. The Net Owned Funds required are as follows: Category Minimum Net Owned Funds Single branch FFMC Rs..25 lakh Multiple branch FFMC Rs..50 lakh 3. Applications for renewal should be submitted along with the documents, mentioned below. (a) Copy of the latest audited accounts with a certificate from the Statutory Auditors regardi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claration in CDF. (ii) AMCs may sell Indian Rupees to foreign tourists / visitors against International Credit Cards / 1 International Debit Cards and take prompt steps to obtain reimbursement through normal banking channels. 3. Encashment Certificate (i) AMCs may issue certificate of encashment when asked for in cases of purchases of foreign currency notes, coins and travellers cheques from residents as well as non-residents. These certificates bearing authorized signatures should be issued on the letter head of the money changer and proper record should be maintained. (ii) In cases where encashment certificate is not issued, attention of the customers should be drawn to the fact that unspent local currency held by non-residents will be allowed to be converted into foreign currency only against production of a valid encashment certificate. 4. Purchases from other AMCs and Authorized Dealers (ADs) AMCs may purchase from other AMCs and ADs any foreign currency notes, coins and encashed travellers' cheques tendered in the normal course of business. Rupee equivalent of the amount of foreign exchange purchased should be paid only by way of crossed account payee cheque/Demand Draf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rivate visit or for any other purpose). Wherever the sale of foreign exchange exceeds the amount equivalent to Rs.50,000/-, the payment must be received only by a crossed cheque drawn on the applicant's bank account or crossed cheque drawn on the bank account of the firm / company sponsoring the visit of the applicant or Banker's cheque / Pay Order / Demand Draft. For this purpose, where the Rupee equivalent of foreign exchange drawn exceeds Rs. 50,000/- either for any single drawal or more than one drawal reckoned together for a single journey visit, it should be paid by crossed cheque/ Banker's cheque / Pay Order / Demand Draft. In addition to the payment by Rupees/ through crossed cheque/ Banker's cheque/ Pay order/ Demand draft, AMCs may also accept the payments made by the traveller through debit cards/ credit cards/ prepaid cards for travel abroad (for private visit or for any other purpose) provided- (i) KYC/ AML / CFT guidelines are complied with, (ii) sale of foreign currency/ issue of foreign currency travellers' cheques is within the limits (credit/ prepaid cards) prescribed by the bank, (iii) the purchaser of foreign currency/ foreign currency travellers' cheque and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t payee crossed cheques / demand drafts. Under no circumstances should settlement be made in cash. 11. Replenishment of Foreign currency Balances (i) AMCs may obtain their normal business requirements of foreign currency notes from other AMCs / authorized dealers in foreign exchange in India, against payment in rupees made by way of account payee crossed cheque / Demand Draft. (ii) Where AMCs are unable to replenish their stock in this manner, they may make an application to the Forex Markets Division, Foreign Exchange Department, Central Office, Reserve Bank of India, Mumbai through an AD Category-I for permission to import foreign currency into India. The import should take place through the designated AD Category-I through whom the application is made. 12. Export / Disposal of surplus Foreign Currency Notes / Travellers' Cheques AMCs may export surplus foreign currency notes / encashed travellers' cheques to an overseas bank through designated Authorized Dealer Category - I in foreign exchange for realization of their value through the latter. FFMCs may also export surplus foreign currency to private money changers abroad subject to the condition that either the realizable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... monthly consolidated statement for all its offices in respect of sale and purchase of foreign currency notes in form FLM 8 (Annex-XI) so as to reach not later than the 10th of the succeeding month. * AMCs should submit to the Regional Office concerned of the Foreign Exchange Department, Reserve Bank, a monthly statement indicating details of receipt / purchase of US $ 10,000 (or its equivalent) and above per transactions in the enclosed format as at Annex-XII, within 10 days of the close of the month. FFMCs / ADs Category - II should include transactions of their franchisees in their statement. * AMCs should submit a quarterly statement regarding Foreign Currency Account/s maintained in India in their names with AD Category-I Banks to the Regional Office concerned of the Foreign Exchange Department, Reserve Bank as per the format in Annex-XIII. * An Annual Statement should be submitted by all the AMCs to the respective Regional Offices of the Foreign Exchange Department, Reserve Bank which have issued the licenses within one month of the financial year-end, giving the details of the amount written off during the financial year, as per the format as at Annex-XIV. 16. Inspecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... change Department, may be allowed to open Foreign Currency Accounts in India, subject to the following conditions:- (i) Only one account may be permitted at a particular centre. (ii) Only the value of foreign currency notes/ encashed TCs exported through the specific bank and realized can be credited to the account. (iii) Balances in the accounts shall be utilized only for settlement of liabilities on account of- (a) TCs sold by the AMCs and (b) Foreign currency notes acquired by the AMCs from AD Category-I banks. (iv) No idle balance shall be maintained in the said account. (B) Opening of Nostro Account by Authorised Dealers Category-II Authorised Dealers Category-II may open Nostro Accounts after getting one time approval from the Reserve Bank, subject to following terms and conditions. i) Only one Nostro account for each currency may be opened; ii) Balances in the account should be utilized only for the settlement of remittances sent for permissible purposes and not for the settlement in respect of forex prepaid cards; iii) No idle balance shall be maintained in the said account; and iv) They will be subject to reporting requirements as prescribed from time to time. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er's licence or impose new conditions. SECTION VIII [See SECTION I, Paragraph 2 (iii) (iii)] 'Fit and proper' criteria for directors of FFMCs / non-bank ADs Category - II (a) The Boards of FFMCs / non-bank ADs Category - II should undertake a process of due diligence to determine the suitability of the person for appointment / continuing to hold appointment as a director on the Board, based upon qualification, expertise, track record, integrity and other 'fit and proper' criteria. For assessing integrity and suitability, factors like criminal record, if any, financial position, civil action initiated to pursue personal debts, refusal of admission to or expulsion from professional bodies, sanctions imposed by regulators or similar bodies, previous questionable business practices, etc. should be considered. The Board of Directors should assess 'fit and proper' status by calling for information by way of self-declaration, verification reports from market, etc. FFMCs / non-bank ADs Category - II should obtain necessary information and declaration from the proposed / existing directors for the purpose in Proforma given at the end. (b) The process of due diligence should be undertak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer) : Place : Company : Annex-I [See SECTION VI] PART A KYC / AML / CFT Guidelines for money changing activities Know Your Customer (KYC) norms / Anti-Money Laundering (AML) standards / Combating the Financing of Terrorism (CFT) / Obligation of APs under Prevention of Money Laundering Act, (PMLA), 2002, as amended by Prevention of Money Laundering (Amendment) Act, 2009 - Money Changing activities 1. Introduction The offence of Money Laundering has been defined in Section 3 of the Prevention of Money Laundering Act, 2002 (PMLA) as "whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime and projecting it as untainted property shall be guilty of offence of money laundering". Money Laundering can be called a process by which money or other assets obtained as proceeds of crime are exchanged for "clean money" or other assets with no obvious link to their criminal origins. There are three stages of money laundering during which there may be numerous transactions made by launderers that could alert an institution to criminal activity- * Placeme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dures; c) Monitoring of Transactions; and d) Risk Management. 4.3 Customer Acceptance Policy (CAP) a) Every AP should develop a clear Customer Acceptance Policy laying down explicit criteria for acceptance of customers. The Customer Acceptance Policy must ensure that explicit guidelines are in place on the following aspects of customer relationship in the AP: (i) No transaction is conducted in anonymous or fictitious/benami name(s). [In view of In terms of Government of India Notification dated June 16, 2010 Rule 9, sub-rule (1C) - APs should not allow any transaction in any anonymous or fictitious name (s) or on behalf of other persons whose identity has not been disclosed or cannot be verified]. (ii) Parameters of risk perception are clearly defined in terms of the nature of business activity, location of customer and his clients, mode of payments, volume of turnover, social and financial status etc. to enable categorisation of customers into low, medium and high risk (APs may choose any suitable nomenclature viz. level I, level II and level III). Customers requiring very high level of monitoring, e.g. Politically Exposed Persons (PEPs) may, if considered necessary, be cat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and entities whose identities and sources of wealth can be easily identified and transactions by whom by and large conform to the known profile, may be categorised as low risk. Customers that are likely to pose a higher than average risk should be categorised as medium or high risk depending on customer's background, nature and location of activity, country of origin, sources of funds and his client profile etc. APs should apply enhanced due diligence measures based on the risk assessment, thereby requiring intensive 'due diligence' for higher risk customers, especially those for whom the sources of funds are not clear. Examples of customers requiring enhanced due diligence include (a) nonresident customers;(b) customers from countries that do not or insufficiently apply the FATF standards (c) high net worth individuals; (d) trusts, charities, NGOs and organizations receiving donations; (e) companies having close family shareholding or beneficial ownership; (f) firms with 'sleeping partners '; (g) politically exposed persons (PEPs); (h) non-face to face customers ; and (i) those with dubious reputation as per public information available etc. However, only Non Profit Organisat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agraph 4.5 below for guidance of APs. APs may, however, frame their own internal guidelines based on their experience of dealing with such persons/entities, their normal prudence and the legal requirements as per established practices. If the AP decides to undertake such transactions in terms of the Customer Acceptance Policy, the AP should take reasonable measures to identify the beneficial owner(s) and verify his/ her/t heir identity in a manner so that it is satisfied that it knows who the beneficial owner(s) is/are [In view of Government of India Notification dated June 16, 2010 - Rule 9 sub-rule (1A) of PML Rules]. Note : Rule 9(1A) of Prevention of Money Laundering Rules 2005 requires that every Authorised Person under money changing activity shall identify the beneficial owner and take all reasonable steps to verify his identity while undertaking money changing activities. The term "beneficial owner" has been defined as the natural person who ultimately owns or controls a client and/or the person on whose behalf the transaction is being conducted, and includes a person who exercises ultimate effective control over a juridical person. Government of India has since examined t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owner of such companies. b) Some close relatives, e.g., wife, son, daughter and parents etc. who live with their husband, father/mother and son/ daughter, as the case may be, may find it difficult to undertake transactions with APs as the utility bills required for address verification are not in their name. It is clarified, that in such cases, APs can obtain an identity document and a utility bill of the relative with whom the prospective customer is living along with a declaration from the relative that the said person (prospective customer) wanting to undertake a transaction is a relative and is staying with him/her. APs can use any supplementary evidence such as a letter received through post for further verification of the address. While issuing operational instructions to the branches on the subject, APs should keep in mind the spirit of instructions issued by the Reserve Bank and avoid undue hardships to individuals who are, otherwise, classified as low risk customers. c) APs should introduce a system of periodic updation of customer identification data (including photograph/s) if there is a continuing business relationship. d) An indicative list of the nature and type o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reporting purposes. (d) In all other cases, APs should make payment by way of 'Account Payee' cheque / demand draft only. (iv) Where the amount of forex tendered for encashment by a non-resident or a person returning from abroad exceeds the limits prescribed for Currency Declaration Form (CDF), the AP should invariably insist for production of declaration in CDF. (v) In case of any suspicion of money laundering or terrorist financing, irrespective of the amount involved, enhanced Customer Due Diligence (CDD) should be applied. Whenever there is a suspicion of money laundering or terrorist financing or when other factors give rise to a belief that the customer does not in fact pose a low risk, APs should carry out a full scale CDD before undertaking any transaction for the customer. f) Sale of foreign exchange to customers (i) In all cases of sale of foreign exchange, irrespective of the amount involved, for identification purpose the passport of the customer should be insisted upon and sale of foreign exchange should be made only on personal application and after verification of the identification document. A copy of the identification document should be retained by the AP. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... higher risk categories of customers or business relationships. When a business relationship is already in existence and it is not possible to perform customer due diligence on the customer in respect of business relationship, APs should terminate the business relationship and make a Suspicious Transaction Report to FIU-IND. In the circumstances when an AP believes that it would no longer be satisfied that it knows the true identity of the customer (individual/ business entity), the AP should also file an STR with FIU-IND. 4.5 Customer Identification Requirements - Indicative Guidelines i) Transactions by Trust/Nominee or Fiduciary Customers There exists the possibility that trust/nominee or fiduciary relationship can be used to circumvent the customer identification procedures. APs should determine whether the customer is acting on behalf of another person as trustee/nominee or any other intermediary. If so, APs should insist on receipt of satisfactory document of identity of the intermediaries and of the persons on whose behalf they are acting, as also obtain details of the nature of the trust or other arrangements in place. While undertaking a transaction for a trust, APs sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nship with the PEP should be taken at a sufficiently senior level. These instructions are also applicable to individual transactions/ business relationship where a PEP is the ultimate beneficial owner. Further, in regard to individual transactions/ business relationship in case of PEPs, it is reiterated that APs should have appropriate ongoing risk management procedures for identifying and applying enhanced CDD to PEPs, customers who are family members or close relatives of PEPs and individual transactions/ business relationship of which a PEP is the ultimate beneficial owner. 4.6 Monitoring of Transactions Ongoing monitoring is an essential element of effective KYC procedures. APs can effectively control and reduce their risk only if they have an understanding of the normal and reasonable activity of the customer so that they have the means of identifying transactions that fall outside the regular pattern of activity. However, the extent of monitoring will depend on the risk sensitivity of the transaction. APs should pay special attention to all complex, unusually large transactions and all unusual patterns which have no apparent economic or visible lawful purpose. APs may presc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es and procedures are implemented effectively. APs should, in consultation with their boards, devise procedures for creating risk profiles of their existing and new customers and apply various anti money laundering measures keeping in view the risks involved in a transaction or business relationship. b) APs' internal audit and compliance functions have an important role in evaluating and ensuring adherence to the KYC policies and procedures. As a general rule, the compliance function should provide an independent evaluation of the AP's own policies and procedures, including legal and regulatory requirements. APs should ensure that their audit machinery is staffed adequately with individuals who are well-versed in such policies and procedures. The concurrent auditors should check all transactions to verify that they have been undertaken in compliance with the anti-money laundering guidelines and have been reported whenever required to the concerned authorities. Compliance on the lapses, if any, recorded by the concurrent auditors should be put up to the Board. A certificate from the Statutory Auditors on the compliance with KYC/ AML/ CFT guidelines should be obtained at the time of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with persons (including legal persons and other financial institutions) from or in these countries/ jurisdictions and give special attention to these cases. 4.11 Applicability to branches and subsidiaries outside India The guidelines contained in this circular shall apply to the branches and majority owned subsidiaries located abroad, especially, in countries which do not or insufficiently apply the FATF Recommendations, to the extent local laws permit. When local applicable laws and regulations prohibit implementation of these guidelines, the same should be brought to the notice of the Reserve Bank. In case there is a variance in KYC/AML/ CFT standards prescribed by the Reserve Bank and the host country regulators, branches/overseas subsidiaries of APs are required to adopt the more stringent regulation of the two. 4.12 Principal Officer a) APs should appoint a senior management officer to be designated as Principal Officer. Principal Officer shall be located at the head/corporate office of the AP and shall be responsible for monitoring and reporting of all transactions and sharing of information as required under the law. The role and responsibilities of the Principal Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en Lakh or its equivalent in foreign currency where such series of transactions have taken place within a month and the aggregate value of such transactions exceeds Rupees Ten Lakh; c) all transactions involving receipts by non-profit organizations of value more than Rupees ten lakh or its equivalent in foreign currency [ In view of Government of India Notification dated November 12, 2009- Rule 3, sub-rule (1) clause (BA) of PML Rules] ; d) all cash transactions where forged or counterfeit currency notes or bank notes have been used as genuine and where any forgery of a valuable security or a document has taken place facilitating the transaction; and e) all suspicious transactions whether or not made in cash and by way of as mentioned in the Rules. (ii) Information to be preserved APs are required to maintain all necessary information in respect of transactions referred to in Rule 3 to permit reconstruction of individual transactions including the following information: * the nature of the transactions; * the amount of the transaction and the currency in which it was denominated; * the date on which the transaction was conducted; and * the parties to the transaction ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue of Transactions, the Procedure and Manner of Maintaining and Time for Furnishing Information and Verification and Maintenance of Records of the Identity of the Clients of the Banking Companies, Financial Institutions and Intermediaries) Rules, 2005 as amended from time to time. (iv) Reporting to Financial Intelligence Unit - India a) In terms of the PML rules, APs are required to report information relating to cash and suspicious transactions to the Director, Financial Intelligence Unit-India (FIU-IND) in respect of transactions referred to in Rule 3 at the following address: The Director, Financial Intelligence Unit-India (FIU-IND) 6th Floor, Hotel Samrat, Chanakyapuri, New Delhi-110021. Website - http://fiuindia.gov.in/ b) APs should carefully go through all the reporting formats. There are altogether four reporting formats, as detailed in PART C of Annex-I, viz. i) Cash Transactions Report (CTR); ii) Electronic File Structure-CTR; iii) Suspicious Transactions Report (STR); iv) Electronic File Structure-STR. The reporting formats contain detailed guidelines on the compilation and manner/procedure of submission of the reports to FIU-IND. It would be necessary for APs to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ided: a) The CTR is generated in the format prescribed by Reserve Bank in Para 4.13(iv)(b) of this Circular; b) A copy of the monthly CTR submitted on its behalf to the FIU-India is available at the concerned branch for production to auditors/inspectors, when asked for. c) The instruction on 'Maintenance of records of transactions'; 'Information to be preserved' and 'Maintenance and Preservation of records' as contained above in this circular at Para 4.13 (i), (ii) and (iii) respectively are scrupulously followed by the branch. However, in respect of branches not under central computerized environment, the monthly CTR should continue to be compiled and forwarded by the branch to the Principal Officer for onward transmission to the FIU-IND. B) Suspicious Transaction Reports (STR) (i) While determining suspicious transactions, APs should be guided by definition of suspicious transaction contained in PML Rules as amended from time to time. (ii) It is likely that in some cases transactions are abandoned/aborted by customers on being asked to give some details or to provide documents. It is clarified that APs should report all such attempted transactions in STRs, even if not comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such information. There is, therefore, a need for APs to prepare specific literature/ pamphlets etc. so as to educate the customer of the objectives of the KYC programme. The front desk staff needs to be specially trained to handle such situations while dealing with customers. b) Employees' Training APs must have an ongoing employee training programme so that the members of the staff are adequately trained to be aware of the policies and procedures relating to prevention of money laundering, provisions of the PMLA and the need to monitor all transactions to ensure that no suspicious activity is being undertaken under the guise of money changing. Training requirements should have different focuses for frontline staff, compliance staff and staff dealing with new customers. It is crucial that all those concerned fully understand the rationale behind the KYC policies and implement them consistently. The steps to be taken when the staff come across any suspicious transactions (such as asking questions about the source of funds, checking the identification documents carefully, reporting immediately to the Principal Officer, etc.) should be carefully formulated by the AP and suitable pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntity Card (iv) Driving licence (v) Identity card (subject to the AP's satisfaction) (vi) Letter from a recognized public authority or public servant verifying the identity and residence of the customer to the satisfaction of the AP (i) Telephone bill (ii) Bank account statement (iii) Letter from any recognized public authority (iv) Electricity bill (v) Ration card (vi) Letter from employer (subject to satisfaction of the AP) (any one of the documents, which provides customer information to the satisfaction of the AP will suffice ) Note :- (1) If the address on the document submitted for identity proof by the prospective customer is same as that declared by him/her, the document may be accepted as a valid proof of both identity and address. If the address indicated on the document submitted for identity proof differs from the current address declared by the customer, a separate proof of address should be obtained. (2) In case of foreign tourists, copies of passport containing identification particulars and address, may be accepted as documentary proof for both identification as well as address. Further, a copy of the visa of non-residents, duly stamped by Indian Immigration aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above reports, please refer to the attachments after (F-Part-III) [Annex to A.P. (DIR Series) Circular No.17 {A.P. (FL/RL Series) Circular No. 4 } dated November 27, 2009 ]. APs may also visit the website of the FIU-IND, i.e., http://fiuindia.gov.in Note: FIU-IND have now advised that the 'go-live' date is October 20, 2012 and that Authorised Persons, who are Indian agents under MTSS may discontinue submission of reports in CD format after October 20, 2012, using only FINnet gateway for uploading of reports in the new XML reporting format. Any report in CD format received after October 20, 2012 will not be treated as a valid submission by FIU-IND. Annex-II [See SECTION I, Paragraph 2 (ii)] Application Form for FFMC licence under section 10(1) of FEMA, 1999 1. Full name of the applicant 2. Address in full 3. Name of location/s to where the applicant proposes to conduct Money Changing Business (Please enclose copies of the Licences under Shops and Establishment Act) 4. (a) Date of establishment of the company (b) Name/s and address/es of the Directors of the company 5. Copy of the Certificate of Registration (Certificate of Incorporation & Certificate of Commencem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se, if any, cases initiated/ pending against the franchisee or its directors/ partners by any law enforcing agency, if any 8. PAN Numbers of the franchisee and its directors/ partners 9. Arrangements in place to surrender the foreign exchange 10. AML, Reporting, Audit and Inspection arrangements We declare that while selecting the franchisees adequate due diligence has been carried out and that such entities have undertaken to comply with all the provisions of the franchising agreement/prevailing RBI regulations regarding money changing. Place:- Date :- Authorized Signatory Annex-IV [See SECTION V , Paragraph 14 (i) (a)] FLM 1 Daily Summary and Balance Book (Foreign Currency notes/coins) Date: Pound Sterling U.S. Dollar Euro Yen Other (Pl. specify) I. Opening Balance II. Add: Purchases (i) Purchases from the public (ii) Purchases from authorized dealers, money- changers and franchisees (iii)Import from abroad for replenishment of stock Total purchases Total (I + II) III.Less Sales: (i) Sales to public (ii) Sales to authorized dealers/ full-fledged money changers (iii) Despatched abroad for realization Total Sales IV.Closing Balance (I + II - II ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14 (i) (e)] FLM 5 Register of sales of foreign currencies to the public Date Sr. No. Name of the tenderer Nationality & Full Address Details of Identification Document Name of the sponsoring Organisation Country/ies of visit Purpose of visit Duration of stay abroad (No. of days) 1. 2. 3. 4. 5. 6. 7. 8. 9. Particulars of foreign currency notes/coins/ TCs/pre-paid cards Rate Rupee equivalent Commission charged, if any Total amount received Cash Memo No. & Date Remarks Name of currency Amount in Notes/ coins Amount in TCs/ cards By Cash By Cheque 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. NOTES:(1) If the money-changer is dealing in a large number of currencies, two or more registers currency-wise or otherwise may be maintained, as convenient. (2) If more than one currency is sold, separate entries may be made (3) The columns 6 and 9 to be filled in case of release of exchange for business purpose Date: Name:_________________________ Designation:__________________ Annex-IX [See SECTION V , Paragraph 14 (i) (f)] FLM 6 Register of sales of foreign currency notes/coins to authorised dealers / full fledged money changers/overseas ban ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Travel (S0301) (c) Remittance by tour operators / travel agents to overseas agents / principals / hotels( S0306) (d) Film shooting(S1101) (e) Medical Treatment abroad(S0304) (f) Disbursement of crew wages(S1401) (g) Overseas Education(S0305) (h) (i) Fee for participation in global conferences and specialized training / (ii) Remittance for participation in international events / competitions (towards training, sponsorship and prize money)/ (iii) Remittance under educational tie up arrangements with universities abroad/(iv) Remittance towards fees for examinations held in India and abroad and additional score sheets for GRE, TOEFL etc./ (v) Employment and processing, assessment fees for overseas job applications/(vi) Skills / credential assessment fees for intending migrants/(vii) Visa fees /(viii) Processing fees for registration of documents as required by the Portuguese / other Governments/ (ix) Registration / Subscription / Membership fees to International Organizations (S1102) (h) Emigration Fees (S1202) (i) Emigration Consultancy Fees (S1006) (k) Sales to other FFMCs/ADs including exports C. Total Sales [ (a) + (b) + (c) + (d) + (e) + (f) + (g) + (h )+ (i) + (j)+ (k) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ular No. 1] November 12, 2002 2. A.P. (DIR Series) Circular No.57[ A.P.(FL/ RL Series) Circular No. 04] March 9, 2009 3. A.P. (DIR Series) Circular No.06 [A.P.(FL/ RL Series) Circular No. 01] August 3, 2009 4. A.P. (DIR Series) Circular No. 17 [ A.P.(FL Series) Circular No. 04] November 27, 2009 5 A.P.(DIR Series) Circular No.18 [ A.P.(FL Series ) Circular No. 01] November 25, 2010 6 A.P. (DIR Series) Circular No.20 [A.P. (FL/RL Series) Circular No.03] November 30, 2010 7 A.P. (DIR Series) Circular No.24 [A.P. (FL/RL Series) Circular No.05] December 13, 2010 8 A.P. (DIR Series) Circular No.25 [A.P. (FL/RL Series) Circular No.06] December 22, 2010 9 A.P. (DIR Series) Circular No.27 [A.P. (FL/RL Series) Circular No.08] December 22, 2010 10 A.P. (DIR Series) Circular No.40 [A.P. (FL/RL Series) Circular No.10] January 25, 2011 11 A.P. (DIR Series) Circular No.49 [A.P. (FL/RL Series) Circular No.11] April 06, 2011 12 A.P. (DIR Series) Circular No.51 [A.P. (FL/RL Series) Circular No.13] April 06, 2011 13 A.P. (DIR Series) Circular No.61 May 16, 2011 14 A.P. (DIR Series) Circular No.63 May 20, 2011 15 A.P. (DIR Series) Circular No.65 May 20, 2011 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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