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Prevention of Money-laundering (Maintenance of Records) Amendment Rules 2013.

Money Laundering - 12/2013 - Dated:- 27-8-2013 - MINISTRY OF FINANCE (Department of Revenue) NOTIFICATION New Delhi, the 27th August, 2013 G.S.R. 576(E).- In exercise of the powers conferred by sub-section (1) read with clauses (i), (j) and (k) of subsection (2) of section 73 of the Prevention of Money-laundering Act, 2002 (15 of 2003), the Central Government in consultation with the Reserve Bank of India hereby makes the following rules further to amend the Prevention of Money-laundering (Maint .....

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I) after clause (b), the following clause shall be inserted, namely : - (ba) Designated Director means a person designated by the reporting entity to ensure overall compliance with the obligations imposed under chapter IV of the Act and the Rules and includes - (i) the Managing Director or a whole-time Director duly authorized by the Board of Directors if the reporting entity is a company, (ii) the managing partner if the reporting entity is a partnership firm, (iii) the proprietor if the report .....

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erms Managing Director and Whole-time Director shall have the meaning assigned to them in the Companies Act, 1956 (1 of 1956); ; (III) in clause (c), for the words and numbers sections 12 and 13 , the words, numbers and letter sections 12, 12A and 13 shall be substituted; (IV) in clause (d), for the words Reserve Bank of India or any other document as may be required by the banking companies, or financial institution or intermediary , the word Regulator shall be substituted; (V) after clause (d) .....

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ed photograph of the person; ; (VI) in clause (f), for the words banking company, financial institution or intermediary, as the case may be , the words reporting entity shall be substituted; (VII) in clause (fa), for the words banking companies, financial institutions or intermediaries, as the case may be , the words reporting entities or the Director as may be notified by the Government for a specific reporting entity or a class of reporting entities or for a specific purpose shall be substitut .....

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heque, payment order or other instruments or by electronic or other non-physical means; (iii) the use of a safety deposit box or any other form of safe deposit; (iv) entering into any fiduciary relationship; (v) any payment made or received in whole or in part of any contractual or other legal obligation; (vi) any payment made in respect of playing games of chance for cash or kind including such activities associated with casino; and (vii) establishing or creating a legal person or legal arrange .....

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ten lakh or its equivalent in foreign currency where such series of transactions have taken place within a month and the monthly aggregate exceeds an amount of ten lakh rupees or its equivalent in foreign currency; ; (II) after clause (D), the following clauses (E) and (F) shall be inserted, namely: - (E) all cross border wire transfers of the value of more than five lakh rupees or its equivalent in foreign currency where either the origin or destination of fund is in India; (F) all purchase and .....

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ting entity shall evolve an internal mechanism for maintaining such information in such form and manner and at such intervals as may be specified by its regulator from time to time. (3) It shall be the duty of every reporting entity, its designated director, officers and employees to observe the procedure and the manner of maintaining information as specified by its regulator under sub-rule (1). . (d) rule 6 shall be omitted; (e) for rules 7, 8, 9, and 10, the following rules shall be substitute .....

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Officer for the purposes of official record. (3) Every reporting entity shall evolve an internal mechanism having regard to any guidelines issued by regulator, for detecting the transactions referred to in clauses (A),(B),(BA),(C),(D), (E) and (F) of sub-rule (1) of rule 3 and for furnishing information about such transactions in such form as may be directed by its Regulator. (4) It shall be the duty of every reporting entity, its designated director, officers and employees to observe the proced .....

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mail to the Director in respect of transactions referred to in clause (D) of sub-rule (1) of rule 3 not later than seven working days on being satisfied that the transaction is suspicious. (3) The Principal Officer of a reporting entity shall furnish, the information in respect of transactions referred to in clause (F) of sub-rule (1) of rule 3, every quarter to the Director by the 15th day of the month succeeding the quarter. (4) For the purpose of this rule, delay of each day in not reporting .....

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, and identify the beneficial owner and take all steps to verify the identity of the beneficial owner: Provided that where the Regulator is of the view that money laundering and terrorist financing risks are effectively managed and where this is essential not to interrupt the normal conduct of business, the Regulator may permit the reporting entity to complete the verification as soon as reasonably practicable following the establishment of the relationship; and (b) in all other cases, verify id .....

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rty; (b) the reporting entity takes adequate steps to satisfy itself that copies of identification data and other relevant documentation relating to the client due diligence requirements will be made available from the third party upon request without delay; (c) the reporting entity is satisfied that such third party is regulated, supervised or monitored for, and has measures in place for compliance with client due diligence and record-keeping requirements in line with the requirements and oblig .....

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be determined as under - (a) where the client is a company, the beneficial owner is the natural person(s), who, whether acting alone or together, or through one or more juridical person, has a controlling ownership interest or who exercises control through other means. Explanation.- For the purpose of this sub-clause- 1. Controlling ownership interest means ownership of or entitlement to more than twenty-five percent of shares or capital or profits of the company; 2. Control shall include the r .....

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unincorporated association or body of individuals, the beneficial owner is the natural person(s), who, whether acting alone or together, or through one or more juridical person, has ownership of or entitlement to more than fifteen percent of the property or capital or profits of such association or body of individuals; (d) where no natural person is identified under (a) or (b) or (c) above, the beneficial owner is the relevant natural person who holds the position of senior managing official; ( .....

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to identify and verify the identity of any shareholder or beneficial owner of such companies. (4) Where the client is an individual, he shall for the purpose of sub-rule (1), submit to the reporting entity, one certified copy of an officially valid document containing details of his identity and address, one recent photograph and such other documents including in respect of the nature of business and financial status of the client as may be required by the reporting entity : Provided that photo .....

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s under his signature that the person opening the account has affixed his signature or thumb print, as the case may be, in his presence; (ii) a small account shall be opened only at Core Banking Solution linked banking company branches or in a branch where it is possible to manually monitor and ensure that foreign remittances are not credited to a small account and that the stipulated limits on monthly and annual aggregate of transactions and balance in such accounts are not breached, before a t .....

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unt shall be monitored and when there is suspicion of money laundering or financing of terrorism or other high risk scenarios, the identity of client shall be established through the production of officially valid documents, as referred to in sub-rule (4) of rule 9; and (v) foreign remittance shall not be allowed to be credited into a small account unless the identity of the client is fully established through the production of officially valid documents, as referred to in sub-rule (4) of rule 9 .....

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ts behalf. (7) Where the client is a partnership firm, it shall for the purposes of sub-rule (1) submit to the reporting entity one certified copy of the following documents:- (i) registration certificate; (ii) partnership deed; and (iii) an officially valid document in respect of the person holding an attorney to transact on its behalf. (8) Where the client is a trust, it shall, for the purposes of sub-rule (1) submit to the reporting entity one certified copy of the following documents:- (i) r .....

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in respect of the person holding an attorney to transact on its behalf; and (iv) such information as may be required by the reporting entity to collectively establish the legal existence of such an association or body of individuals. (10) Where the client is a juridical person, the reporting entity shall verify that any person purporting to act on behalf of such client is so authorized and verify the identity of that person. (11) No reporting entity shall allow the opening of or keep any anonym .....

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laundering or financing of the activities relating to terrorism or where there are doubts about the adequacy or veracity of previously obtained client identification data, the reporting entity shall review the due diligence measures including verifying again the identity of the client and obtaining information on the purpose and intended nature of the business relationship, as the case may be. (iii) The reporting entity shall apply client due diligence measures also to existing clients on the ba .....

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and products, services, transactions or delivery channels that is consistent with any national risk assessment conducted by a body or authority duly notified by the Central Government. (ii) The risk assessment mentioned in clause (i) shall - (a) be documented; (b) consider all the relevant risk factors before determining the level of overall risk and the appropriate level and type of mitigation to be applied; (c) be kept up to date; and (d) be available to competent authorities and self-regulati .....

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oney laundering or terrorist financing, or where specific higher-risk scenarios apply or where the risk identified is not consistent with the national risk assessment. (ii) Every reporting entity shall formulate and implement a Client Due Diligence Programme, incorporating the requirements of sub-rules (1) to (13) and guidelines issued under clause (i) above. (iii) the Client Due Diligence Programme shall include policies, controls and procedures, approved by the senior management, to enable the .....

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e records of the identity of its existing clients, it shall obtain the records within the period specified by the regulator, failing which the reporting entity shall close the account of the clients after giving due notice to the client. Explanation. - For the purpose of this rule, the expression records of the identity of clients shall include updated records of the identification data, account files and business correspondence. ; (f) After rule 10, the following rules shall be inserted, namely .....

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