Financial Intelligence Unit - India Registration
(Price Start at $ 360 /-)
Money laundering refers to the various methodologies used to make assets acquired illicitly appear legal. It involves converting illegally obtained funds into seemingly lawful assets or creating businesses to generate further income for financing the same illicit activities that originally generated the funds. Money laundering and terrorist financing have become pressing concerns for the government and regulatory bodies around the globe.
In India, the primary laws enforced to combat money laundering activities is the Prevention of Money Laundering Act, 2002 (“PMLA”), and Prevention of Money Laundering (Maintenance of Record) Rules, 2005 (“PMLR”). The PMLA read with PMLR are coupled with rules and regulations formed by other regulators such as Reserve Bank of India (“RBI”), Securities Exchange Board of India (“SEBI”) which displays a broad framework for the anti-money laundering laws in India.
Financial Intelligence Unit of India (“FIU-IND”)
FIU-IND was formed in 2004 as the prime body for coordinating India’s
Anti-Money Laundering (“AML”) efforts. The main objectives and function of
FIU-IND is to receive, analyse, process, and disseminate information relating
to suspect financial transactions. FIU-IND is an independent body reporting
directly to the Economic Intelligence Council (EIC) headed by the Ministry.
FIU-IND coordinates and strengthens the efforts of national investigation,
international intelligence, and enforcement agencies in pursuing the global
efforts against money laundering and financing of terrorism.
Enforcement Directorate
The origin of this Directorate dates back to 1st May, 1956, when an ‘Enforcement Unit’ was formed in the Department of Economic Affairs (“DEA”) for handling exchange control laws violations under Foreign Exchange Regulation Act, 1947 (“FERA”) (succeeded by Foreign Exchange Management Act, 1999 (“FEMA”)). The Directorate of Enforcement or Enforcement Directorate (“ED”) is a multi-disciplinary organization which has powers to investigate the offences under money laundering and foreign exchange laws. The ED can enforce the following Acts:
- FEMA, a law civil in nature dealing with permissibility, restrictions, prohibitions, and contraventions of exchange control laws and imposes penalties.
- PMLA, a law criminal in nature to prevent and combat money laundering and terror financing activities and punishment thereunder.
- Fugitive Economic Offenders Act, 2018,
- Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974.
What are the documents required to take the registration with FIU-IND?
The inclusive list of documents to be submitted for the registration:
- Brief on nature of business of Reporting Entity.
- Notification details under which he the entity is categorized as a Reporting Entity.
- Brief note on corporate structure of the Reporting Entity.
- Details of significant beneficial ownership of the Reporting Entity.
- Copies of documents related to incorporation documents.
- Financial statements of the Reporting Entity for last 3 financial years.
- Copies of GST registrations and GST returns for last 3 financial years.
- Copies of income tax returns.
- A self-declaration that no proceedings have been initiated or pending with the ED or other authorities, against the applicant or its directors/partners.
- A self-declaration that no criminal cases are initiated or pending against the applicant or its directors/partners.
- Any other information/document as may be required.
PMLA and Reporting Entities Compliance Responsibility
‘Reporting Entity’ are entities notified under section 2(1)(wa) of the PMLA from time to time (“Reporting Entity”). Reporting Entity are expected to comply with the regulations and guidelines issued by the regulatory authorities including but not limited to Know Your Client (“KYC”) Directions, AML Guidelines and Countering the Financing of Terrorism (“CFT”) Guidelines. This involves registering with the FIU-IND developing and implementing robust AML, CFT and KYC policies within their organizations and training their employees to identify suspicious transaction.
Registration with FIU-IND:
Chapter IV of the PMLA read with Rule 7(1) of the PMLR, stipulates that the Reporting Entity are required to get themselves registered with the Director, FIU-IND and also require to communicate the name, designation and address of their designated Director and the principal officer.
Compliances under AML and CFT Guidelines:
The AML & CFT Guidelines are issued for Reporting Entities across various sectors to meet the expected compliances under the regulations, which includes client due diligence, enhanced due diligence, suspicious activity reporting, record-keeping, ensure that records are accessible for regulatory examinations and audits, regulatory reporting, audits & assessments, etc.
How can Seedling help you with FIU-IND Registration and PMLA Compliance in India?
- Seedling Assistance with registering your Reporting Entity with FIU-Ind.
- Communicate the name, designation and address of the designated director and principal officer of the Reporting Entity to the Regulators.
- Formulating the Client Due Diligence
Programme which are specific to requirements of the Reporting Entity.
Most common question about our services
Who is a reporting entity?
Reporting entity as defined under PMLA shall mean a banking company,
intermediary financial institution or a person carrying on a designated
business or profession. Certain notified reporting entities to such as real
estate agents, jewelers, virtual digital assets service providers, trust and company
service providers, etc.
Why do you need to engage an expert for FIU-IND registration?
While registration with the FIU-IND seems to be a sole obligation
of the Reporting Entity, it is bundled compliance with all the requirements
under the PMLA, PMLR and various other guidelines. The FIU-IND will scrutinize
the application and may require further information/documentation to be
furnished by the FIU-IND. The FIU-IND, in most cases, asks the relevant officer
of the entity to appear before it in an in-person meeting.
What actions can be taken by FIU-IND?
Section 13 of PMLA
empowers Director, FIU-IND to make enquiry and impose fine in required cases.
For the purposes of section 13, Director, FIUIND has the same powers as are
vested in a civil court under the Code of Civil Procedure, 1908, which include
the following:
- Issuance of a warning
- Issuance of a direction to a reporting entity to comply with the specific instructions;
- Issuance of a direction to a reporting entity to send reports at specified intervals as regards measures being taken to observe compliance;
- Imposition of a monetary penalty on the reporting entity.
Who Needs to Complete FUI-IND Registration in India?
All entities classified as Reporting Entities under the PMLA, such as banks, financial intermediaries, and securities market participants, must complete FUI-IND Registration to comply with legal requirements and avoid penalties.
What is FUI-IND Registration, and Why is it Important for Financial Institutions in India?
FUI-IND Registration is mandatory for entities like banks, financial institutions, and intermediaries in India to comply with the Prevention of Money Laundering Act (PMLA). This ensures transparency and proper reporting of suspicious transactions, helping combat money laundering and terrorist financing.
What are the Steps Involved in the FUI-IND Registration Process?
The FUI-IND Registration process involves submitting the required documents, completing the online application, and fulfilling the compliance requirements as per the Financial Intelligence Unit (FIU-IND) guidelines. The process ensures that financial institutions adhere to anti-money laundering regulations.
What Documents Are Required for FUI-IND Registration?
To complete FUI-IND Registration, entities must provide KYC documents, proof of establishment, board resolution, and any other relevant documentation required by FIU-IND guidelines. Ensuring accurate documentation is crucial for a smooth registration process.
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