IFSCA GUIDANCE NOTE ON CORRESPONDING CHANGES IN ANTI MONEY LAUNDERING, COUNTER-TERRORIST

The International Financial Services Centres Authority (IFSCA) vide circular ref no. 939/IFSCA/FATF-C/PMLA/2023-24 dated September 08, 2023 has issued a guidance note on corresponding changes in the IFSCA (Anti Money Laundering, Counter-Terrorist Financing and Know Your Customer) Guidelines, 2022 (IFSCA AML/CFT Guidelines) basis the amendments in Prevention of Money-laundering (Maintenance of Records) Amendment Rules, 2005 as notified by the Ministry of Finance vide notifications G.S.R. 652(E) dated September 4, 2023.

The brief summary of corresponding changes incorporated in the IFSCA AML/CFT Guidelines is detailed as under:

• Determination of Beneficial Ownership (BO) in case of partnership firms:
• Reduction of limits from fifteen percent to ten percent of ownership of/entitlement of capital or profits of the partnership
• The criteria for determination of Beneficial Owner has been widened to include, one or more person who “ exercises control through other means”
• Explanation: “Control” include the right to control the management or policy decision.
• In cases of trust, the reporting entity to ensure that the trustees disclose their status at the time of commencement of an account based relationship or when carrying out transactions of an amount equal to or exceeding rupees fifty thousand, whether conducted as a single transaction or several transactions that appear to be connected, or any international money transfer operations.
• The reporting entity to maintain updated records of identity and address proofs of the clients as well as the results of any analysis undertaken for determination of beneficial ownership for a period of at least 6 years from the date of transaction.

The aforesaid changes are applicable and effective from September 04, 2023.

Impact on the IIO:

• Modification / updation of processes pertaining to determination of beneficial ownership
• The results of any analysis undertaken for determination of beneficial ownership to be maintained for a period of at least 6 years from the date of transaction.

The copy of the Guidance Note is attached herewith for your ready reference.

Source category: IFSC Insurance Office

Attachments

• /2023/266_Guidance_to_the_IFSCA_AML,CTF_and_KYC_guidelines.pdf