Money-laundering Third Amendment Rules, 2023

Last updated: 17 October 2023

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Quick Summary

The Ministry of Finance has issued the Prevention of Money-laundering (Maintenance of Records) Third Amendment Rules, 2023. These new rules, effective from their publication date, introduce updated requirements for preventing money laundering and terror financing. Key changes include the mandatory use of reliable and independent sources for client identification and the implementation of group-wide policies for reporting entities to manage risks and share information securely.

MINISTRY OF FINANCE
(Department Of Revenue)
NOTIFICATION

New Delhi, the 17th October, 2023

G.S.R. 745(E).—In exercise of the powers conferred by section 73 of the Prevention of Money-laundering Act, 2002 (15 of 2003), the Central Government hereby makes the following rules further to amend the Prevention of Money-laundering (Maintenance of Records) Rules, 2005, namely: —

1. (1) These rules may be called the Prevention of Money-laundering (Maintenance of Records) Third Amendment Rules, 2023.

(2) They shall come into force on the date of their publication in the Official Gazette.

2. In the Prevention of Money-laundering (Maintenance of Records) Rules, 2005 (hereinafter referred to as the principal rules), in rule 2, in sub-rule (1), in clause (b), after the word “Act”, the words “using reliable and independent sources of identification” shall be inserted.

3. In the principal rules, for rule 3A, the following rule shall be substituted, namely:-

“3A. Implementation of policies by groups.– (1) Every reporting entity, which is part of a group, shall implement group-wide programmes against money laundering and terror financing, including group-wide policies for sharing information required for the purposes of client due diligence and money laundering and terror finance risk management and such programmes shall include adequate safeguards on the confidentiality and use of information exchanged, including safeguards to prevent tipping-off

For full notification please refer to the attachment

FAQ :

These rules are called the Prevention of Money-laundering (Maintenance of Records) Third Amendment Rules, 2023.

The rules come into effect on the date of their publication in the Official Gazette.

A key change is the requirement to use reliable and independent sources of identification when identifying clients.

Reporting entities that are part of a group must implement group-wide programmes against money laundering and terror financing, including policies for information sharing for client due diligence and risk management.

The group-wide programmes must include adequate safeguards on the confidentiality and use of exchanged information, including preventing tipping-off.