One Significant Development - PMLA will now apply to CAs CSs, & CWAs
The laws of the PMLA will now apply to CAs, CSs, and CWAs, forcing them to comply with several obligations such as keeping financial transaction records, identifying and authenticating clients, and reporting suspicious transactions to the financial intelligence unit.
To put the final nail in the coffin for money launderers, Prime Minister Narendra Modi has brought Chartered Accountants, Company Secretaries, and Cost and Works Accountants under the purview of the stringent Prevention of Money Laundering Act (PMLA)!
This has reached the ROOTS of money laundering since money laundering is impossible without Shell Companies and the formation of Shell Companies is impossible without Chartered accountant, Company Secretary’s & CWAs
Who is power to conduct Investigation under PMLA?
- Officers of the Directorate of Enforcement (ED) have the authority to investigate cases of money laundering under Sections 48 and 49 of the PMLA.
- Moreover, Officers are also authorised to initiate the attachment of property proceedings & to launch prosecution in the special court as designation by law.
Section 2(1)(sa); Post Amendment:
The Central Govt through Notification No. S.O. 2036(E), dated 03.05.2023 has notified the amendment to Section 2 of the Act. The following acts committed by those professionals on behalf of any person under investigation under the PMLA will place them in jail as well as the cancellation of their practising certifications for life.
- Creation, operation or management of companies, limited liability partnerships or trusts, and buying and selling of business entities.
- Managing client money, securities or other Assets
- Selling & Buying of any immovable property
- Organisation of contributions for the creation, operation or management of companies
- Management of bank, savings or securities accounts
You may downlowd the notification as here under Link
Investigation under PMLA
- After serving summonses on suspects, investigations under the PMLA must be carried out with the goal of gathering proof of involvement in money laundering.
- Suspects shouldn't be subjected to undue pressure or influence to make false statements while the investigation is being conducted.
- Additionally, persons called should not be viewed as suspects throughout the investigation stage unless it is determined that they were involved in the money laundering offence. Following the conclusion of the inquiry and if the Enforcement Directorate has grounds to think the suspect has engaged in money laundering,
- In accordance with the terms of section 19 of the PMLA, he may detain such a person without a warrant.
The Govt changes to the PMLA has brought practising Chartered Accountants, Company Secretaries, and CWAs Professionals under the jurisdiction of the Prevention of Money-laundering Act, 2002. This action is intended to increase their professional accountability and culpability while also ensuring compliance with the regulations stated in the Prevention of Money-laundering Act of 2002. It intends to combat money laundering and terrorism financing by ensuring that professionals carrying out financial transactions on behalf of their customers are not implicated in such activities, as well as to strengthen India's anti-money laundering the system.