The chartered accountants are in contact with the finance ministry and looking for steerage on the current modifications within the anti-money laundering regulation.
Chartered accountants and firm secretaries usually act as formation brokers for overseas corporations organising companies in India and infrequently present their very own tackle for communication within the preliminary part
Chartered accountants are looking for clarifications on the finance ministry’s current notification on extending the ambit of anti-money laundering regulation as it will probably adversely affect ease of doing enterprise and facilitation of overseas investments.
According to trade sources, chartered accountants (CAs) and firm secretaries usually act as formation brokers for overseas corporations organising companies in India and infrequently present their very own tackle for communication within the preliminary part.
They additionally act as resident administrators of the overseas firm attempting to ascertain presence within the nation and likewise function financial institution accounts on behalf of their purchasers.
Industry sources mentioned there isn’t any approach that an accountant can know whether or not the cash that an investor is bringing into India is bonafide or laundered cash and confirm its supply.
In view of the pending evaluation by the worldwide watchdog on terror financing and cash laundering scheduled later this yr, the finance ministry has in current months tightened and expanded the scope of the Prevention of Money Laundering Act (PMLA).
As a part of the train, chartered and value accountants and firm secretaries have been included within the ambit of the PMLA, in the event that they undertake specified actions on behalf of their purchasers.
These transactions embody shopping for and promoting of properties; administration of financial institution accounts or different belongings; and administration of the businesses, restricted legal responsibility partnerships or trusts.
In one other notification, the ministry mentioned that entities and people working as ‘formation agents’, or performing as director/secretary/associate too can be coated underneath PMLA provisions. It would additionally apply to people or entities who present a enterprise tackle or correspondence tackle for an organization/LLP/belief.
According to trade sources, the actions talked about within the notifications are carried out by CAs for overseas corporations attempting to start out their enterprise in India.
“Chartered accountants can’t examine the cash path for corporations bringing cash to India to start out enterprise. It is the job of Financial Intelligence Unit (FIU) and RBI to examine the supply of funding,” a source said.
According to sources, the chartered accountants are in touch with the finance ministry and seeking guidance on the recent changes in the anti-money laundering law.
At the most, a monetary penalty may be imposed on CAs and not the strict provisions of the PMLA law as several of these activities are part of the temporary hand-holding and accounting support required for facilitating foreign investment.
(This story has not been edited by News18 workers and is printed from a syndicated information company feed)
