Indian finance professionals including chartered accountants, cost accountants, and company secretaries can now face legal action under the anti-money laundering law for carrying out certain financial transactions on behalf of their clients. This new development comes after the Finance Ministry issued a notification on May 3, outlining the specific transactions that are covered by the regulation.
The transactions included in the notification are the buying and selling of any properties, management of bank accounts, managing client money, securities or other assets, organization of contributions for the creation, operation, or management of companies, and the creation, operation, or management of companies, limited liability partnerships, or trusts. Additionally, the regulation applies to the buying and selling of business entities.
This decision marks a significant shift in India’s regulatory landscape, as previously, only banks, financial institutions, and other regulated entities were subject to anti-money laundering laws. With the inclusion of finance professionals, the government aims to crack down on money laundering and illicit financial activities that may be conducted through such professionals.
The notification further states that any financial transactions that are carried out without adequate due diligence or in violation of the anti-money laundering laws will be subject to legal action. The finance professionals involved in such transactions may face imprisonment of up to seven years, along with financial penalties.
To comply with the new regulations, finance professionals will need to implement stricter due diligence measures when conducting financial transactions on behalf of their clients. They will also need to report any suspicious transactions to the relevant authorities, as failure to do so could result in legal action against them.
