Money laundering law to cover professional accountants

The finance ministry introduced changes to the Prevention of Money Laundering Act in which practicing chartered accountants, company secretaries, and cost and works accountants into money laundering law's ambit.

The Union Finance Ministry in a notification dated 3rd May, said that any financial transactions such as buying and selling of any immovable property, managing of client money, securities or other assets, management of bank, savings or securities accounts, organisation of contributions for the creation, operation or management of companies, limited liability partnerships or trusts, and buying and selling of business entities carried out by these professional accountants on behalf of their clients will be recognised under the PMLA.

As per Indian Express, the new changes have been made in the sub-clause (vi) of clause (sa) of sub-section (1) of section 2 of the PMLA, which defines different categories of persons covered under the law. The financial professionals who have obtained certificates of practice as chartered accountants, company secretaries, cost and work accountants would be defined as relevant persons for reporting transactions on behalf of their individual clients.

To incorporate more disclosures for non-governmental organisations, the government in March, widened the ambit of reporting entities under money laundering provisions. The centre also gave a definition for politically exposed persons under the PMLA in line with the FATF recommendations.