Money Laundering LawImage Credit source: File Photo
To prevent black money in the country, the government has made some changes in the Money Laundering Act. So that black money earners can be curbed through deals for the purchase and sale of property. The Finance Ministry has brought Chartered Accountants, Company Secretaries and Cost and Works Accountants under the purview of the Money Laundering Act for carrying out financial transactions on behalf of their clients. However, lawyers and legal professionals will not come under the purview of the money laundering law under the PMLA.
According to the Ministry of Finance, if the professionals who do financial deals like purchase and sale of immovable property on behalf of their clients. So they would be recognized as an activity under the PMLA.
According to experts, the inclusion of CA, CS and CWA was unnecessary given the low conviction rate under the law. Due to some unfortunate incidents, services like setting up of companies by CA, CS and CWA have come under PMLA. PMLA Act is very draconian and compliance is very difficult. The conviction rate in PMLA is very low but going through the entire process is extremely difficult.
read this also –
Companies will get help in investigation
Experts say that the investigation agencies are expected to get help in their investigation against suspicious transactions related to shell companies and money laundering. Several CAs commented against the changes on social media saying that auditors and legal professionals have been left out. The change in the PMLA law also assumes significance ahead of the proposed assessment of India under the Financial Action Task Force (FATF), which is expected to be done later this year. At the same time, the reporting entities will be expected to maintain a record of all transactions, as it will be necessary to give them to the ED.
Transaction information will have to be given
Further, the reporting entities will also be expected to carry out KYC before commencement of each specified transaction and verify the ownership and financial position of the customer including source of funds and record the purpose behind undertaking the transaction. As per FATF recommendations, professionals such as lawyers, notaries, other independent legal professionals and accountants should be required to report suspicious transactions on behalf of or for a customer. He will be attached to financial transactions related to the purchase and sale of immovable property.