RBI/2010-11/293
A.P. (DIR Series) Circular No.21
A.P. (FL Series) Circular No. 04
November 30, 2010
To
All Authorised Persons, who are Indian Agents under the Money Transfer
Service Scheme.
Madam/ Sir,
Know Your Customer (KYC) norms/ Anti-Money Laundering (AML) standards/
Combating the Financing of Terrorism (CFT)/ Obligation of Authorised Persons
under Prevention of Money Laundering Act, (PMLA), 2002, as amended by Prevention
of Money Laundering (Amendment) Act, 2009- Cross Border Inward Remittance under
Money Transfer Service Scheme
Attention of all the Authorised Persons, who are Indian Agents [APs (Indian
Agents)] under the Money Transfer Service Scheme (MTSS) is invited to the A.P.
(DIR Series) Circular No. 18 [ A.P. (FL/ RL Series) Circular No. 05] dated
November 27, 2009 on Know Your Customer (KYC) norms/ Anti-Money Laundering (AML)
standards/ Combating the Financing of Terrorism (CFT)/ Obligation of Authorised
Persons under Prevention of Money Laundering Act, (PMLA), 2002, as amended by
Prevention of Money Laundering (Amendment) Act, 2009 in respect of cross border
inward remittances under Money Transfer Service Scheme (MTSS).
Countries which do not or insufficiently apply the FATF
recommendations
- In Annex – I, paragraph 5.10 (b) of the circular dated November 27,
2009 referred to above, Authorised Persons (Indian Agents) [APs (Indian
Agents)] have been advised to take into account the risks arising from the
deficiencies in AML/ CFT regime of the jurisdictions as identified in the
FATF Statement issued from time to time, while dealing with individuals from
these jurisdictions. It is advised that APs (Indian Agents) should, in
addition to the FATF Statements issued from time to time, also consider
using publicly available information for identifying the countries, which do
not or insufficiently apply the FATF Recommendations. Further, it is
clarified that APs (Indian Agents) should also give special attention to
business relationships and transactions with persons (including legal
persons and other financial institutions) from or in countries that do not
or insufficiently apply the FATF recommendations and jurisdictions included
in FATF Statements.
- In terms of Annex – I, paragraph 5.6 of the circular dated November 27,
2009 referred to above, it is advised that ongoing monitoring is an
essential element of effective KYC procedures. In this regard, it is advised
that APs (Indian Agents) should examine the background and purpose of
transactions with persons (including legal persons and other financial
institutions) from jurisdictions included in the FATF Statements and
countries that do not or insufficiently apply the FATF Recommendations.
Further, if the transactions have no apparent economic or visible lawful
purpose, the background and purpose of such transactions should, as far as
possible, be examined and written findings together with all the documents
should be retained and made available to the Reserve Bank/ other relevant
authorities, on request.
- These guidelines would also be applicable mutatis mutandis to all
Sub-agents of the Indian Agents under MTSS and it will be the sole
responsibility of the APs (Indian Agents) to ensure that their Sub-agents
also adhere to these guidelines.
- Authorised Persons (Indian Agents) should bring the contents of this
circular to the notice of their constituents concerned.
- The directions contained in this circular have been issued under Section
10(4) and Section 11(1) of the Foreign Exchange Management Act, 1999 (42 of
1999) and also under the Prevention of Money Laundering Act, (PMLA), 2002 as
amended by Prevention of Money Laundering (Amendment) Act, 2009 and
Prevention of Money-Laundering (Maintenance of Records of the Nature and
Value of Transactions, the Procedure and Manner of Maintaining and Time for
Furnishing Information and Verification and Maintenance of Records of the
Identity of the Clients of the Banking Companies, Financial Institutions and
Intermediaries) Rules, 2005, as amended from time to time. Non-compliance
with the guidelines would attract penal provisions of the Acts concerned or
Rules made there under.
Yours faithfully,
(Salim Gangadharan)
Chief General Manager-in-Charge