International transactions exceeding Rs 50,000 will now face heightened scrutiny as the Central government on Tuesday notified an amendment to the Prevention of Money Laundering (Maintenance of Records) Rules, 2005.
With the aim of preventing terror financing, every international transaction exceeding Rs 50,000 will be subject to close scrutiny. In this process, reporting entities will not only have to identify clients but also confirm the purpose of the business.
The notification states, “Every reporting entity shall… identify its clients, verify their identity using reliable and independent sources of identification, obtain information on the purpose and intended nature of the business relationship, where applicable and take reasonable steps to understand the nature of the customer’s business, and its ownership and control.”
It further mentions that the reporting entity will have to ‘determine whether a client is acting on behalf of a beneficial owner, and identify the beneficial owner and take all steps to verify the identity of the beneficial owner, using reliable and independent sources of identification.’
Following the release of the notification, netizens began to express concerns if they will face difficulties, with the new rules, while sending money to their children or relatives studying or living abroad.
One individual wrote, “That’s good. But Rs. 50k is a very small amount when converted to dollars. This is the amount the average Indian parent sends to their children studying abroad. Hopefully this new law doesn’t make it harder for such people to transfer the money. I guess terror financing involves much larger amounts and those who want to do it will do so illegally through hawala or through people travelling abroad because when you are travelling abroad you can legally carry up to 10k USD in cash without any problem.”
People have also voiced concerns over the possible hurdles they might face in sending donations or humanitarian aid to communities affected by political violence and calamities abroad.
A representative of noted charity organisation, requesting anonymity, said that a lot of people were considering sending donations to charity organisations working with earthquake victims in Afghanistan, and war-torn population of Gaza. “However, with the introduction of new rules, they will reconsider sending their donations in order to avoid scrutiny. It may become difficult for them to send the donations for various other humanitarian causes that are in dire need of humanitarian support.”
Another user wrote, “Lol, as if they use legal channels to send money.”
Although international transactions exceeding Rs 50,000, including those involving donations and gifts sent globally, will face serious scrutiny, it is likely to aid in the prevention of terror financing.
