India
Last Updated: 12/06/2008 (Anti-money laundering legislation not applicable to lawyers)CENTRAL AUTHORITY FOR REPORTING
Financial Intelligence Unit – India (FIU-IND)
"The Indian Government has a plan to set up a multidisciplinary task force to address its money laundering problems. The panel consists of people from India's Directorate of Revenue Intelligence, the Narcotics Control Bureau, the Enforcement Directorate, the Central Bureau of Investigation, the Intelligence Bureau and others." 1
ARE LAWYERS COVERED BY MONEY LAUNDERING LEGISLATION?
No.
LAWS REGARDING ANTI-MONEY LAUNDERING PROCEDURES
- The Prevention of Money Laundering Act 2002 (PMLA 2002)
It forms the core of the legal framework put in place by India to combat money laundering. PMLA 2002 came into force with effect from July 1, 2005. It imposes an obligation on banking companies, financial institutions and intermediaries to verify the identity of clients, maintain records and furnish information to FIU-IND. - Foreign Exchange Management Act, 1999
It prescribes checks and limitations on certain foreign exchange remittances. - Benami Transactions (Prohibition) Act, 1988
It prohibits transactions in which property is transferred to one person for consideration paid or provided by another person. - The Narcotics Drugs and Psychotropic Substances Act, 1985
It provides for confiscating sale proceeds acquired in relation to any narcotic drug or psychotropic substance and any goods used to conceal such drugs. It provides for forfeiture of any illegally acquired property. - The Prevention of Illicit Traffic in Narcotic Drugs and Psychotropic Substances Act, 1988
It authorizes detaining persons to prevent illicit traffic in narcotic drugs and psychotropic substances. - Know-Your-Customer Guidelines
It was introduced by The Reserve Bank of India to banks in India to reduce financial frauds and identify money-laundering transactions. The obligations imposed by these guidelines were reduced in October 2007 to allow foreigners and non-resident Indians to receive cash payments of up to $3,000 from money changers. Acceptable identity documentation was also expanded to allow money changers to accept a wider class of documents as evidence of a business relationship. (2) - Guidelines for anti-money laundering measures
The Securities and Exchange Board of India (SEBI) has published guidelines for capital market intermediaries under the PMLA 2002. The guidelines concern all intermediaries registered with SEBI — a grouping that includes institutional investors, brokers and portfolio managers.
"In November 2006, India's Insurance Regulatory and Development Authority issued anti-money laundering guidelines that exempt general insurance companies from the need to comply with certain entry-level checks on customers." (3)
On 17 April 2008, India finalized amendments to broaden the reach of its AML laws. The amendments will extend these laws to bring international credit card transactions, money transfers, and offences with “cross border implications” within their ambit. The amendments allow for “single criminality”, whereby a transaction only needs to be illegal in India, and not in the other state involved, in order to risk prosecution for money laundering offenses. (4) The amendments will also expand the reach of the anti-money laundering laws to include casinos, credit card companies, and money changes. It has been reported that India's Union Cabinet has approved the amendments for introduction to parliarment. (5)
UNDER WHAT CIRCUMSTANCES IS A LAWYER UNDER THE OBLIGATION TO REPORT?
Currently, there is no specific law obliging a lawyer to report a money laundering offence.
LAWYER RESPONSIBILITY/LIABILITY
No current obligations for client identification and verification.
CLIENTS’ IDENTIFICATION AND VERIFICATION
Indian lawyers normally do so, but not because there is any obligation. Section 12 of the PMLA 2002, requires every banking company, financial institution and intermediary to verify and maintain the records of the identity of all its clients, as prescribed by Rule 9 of the Rules notified by Notification No.9/2005 dated 1/7/2005.
LAWYERS PROSECUTED FOR MONEY LAUNDERING OFFENCES
No information available.
Information provided by:
Mr. Sandeep Dave
Email: info@globallawreview.com
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Sources
- Chris Hamblin, "India creates its own MLAC", 4 October 2006, www.complinet.com.
- Marcus Simpson, “India's laundering guidelines relaxed for foreigners receiving payments from money changers”, 19 October 2007, www.complinet.com.
- Marcus Simpson, “Indian regulator releases AML guidelines,” 14 Feb 2006, www.complinet.com.
- Marcus Simpson, “India finalises amendments to broaden reach of its AML law” 17 April, 2008. www.complinet.com.
- Marcus Simpson, "India to extend ambit of laundering law" 6 June 2008, www.complinet.com.
