RBI/2010-11/288
A.P. (DIR Series) Circular No.19
A.P. (FL Series) Circular No. 02
November 25, 2010
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
the Prevention of Money Laundering (Amendment) Act, 2009 in respect of cross
border inward remittances under the Money Transfer Service Scheme (MTSS).
Suspicion of money laundering/terrorist financing
- With a view to preventing the system of cross border inward money transfer
into India from all over the world under the MTSS from being used, intentionally
or unintentionally, by criminal elements for money laundering or terrorist
financing activities, it is clarified that whenever there is suspicion of money
laundering or terrorist financing or when other factors give rise to a belief
that the customer does not, in fact, pose a low risk, APs (Indian Agents) should
carry out full scale customer due diligence (CDD) before making payment of any
remittance.
Filing of STR
- In terms of the instructions contained in Para 5.3 (iv) of the circular
dated November 27, 2009 referred to above, AP (Indian Agent) should not make
payment of any remittance where it is unable to verify the identity and/ or
obtain required documents. It is clarified that in the circumstances when an AP
(Indian Agent) believes that it would no longer be satisfied that it knows the
true identity of the customer, the AP (Indian Agent) should also file an STR
with FIU-IND.
Politically Exposed Persons (PEPs)
- In terms of the instructions contained in Para 5.5 of the circular dated
November 27, 2009 referred to above, the decision to undertake a transaction
with a PEP should be taken at a senior level which should be clearly spelt out
in the Customer Acceptance Policy. APs (Indian Agents) should also subject such
transactions to enhanced monitoring on an ongoing basis. The above norms may
also be applied to customers who become PEPs subsequent to establishment of the
business relationship. It is clarified that the instructions contained in
paragraph 5.5 of the circular are also applicable to transactions where a PEP is
the ultimate beneficial owner. Further, in regard to transactions in case of
PEPs, it is reiterated that APs (Indian Agents) should have appropriate ongoing
risk management procedures for identifying and applying enhanced CDD to PEPs,
customers who are family members or close relatives of PEPs and transactions of
which a PEP is the ultimate beneficial owner.
Principal Officer
- 5. With reference to the Para 5.11 of the circular dated November 27, 2009
referred to above, regarding appointment and responsibility of the Principal
Officer, it is clarified that the role and responsibilities of the Principal
Officer should include overseeing and ensuring overall compliance with
regulatory guidelines on KYC/ AML/ CFT issued from time to time and obligations
under the Prevention of Money Laundering Act, 2002, as amended by Prevention of
Money Laundering (Amendment) Act, 2009, rules and regulations made there under,
as amended from time to time.
- 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