The Centre on Tuesday further tightened the record keeping in case of international transactions above Rs 50,000 to prevent terror financing when it notified an amendment to the Prevention of Money-laundering (Maintenance of Records) Rules, 2005.
A reporting entity will have to identify clients for every international transaction above Rs 50,000. It will verify their identity and also ascertain purpose of the business if not well defined.
The latest rule also mandated reporting entities, which are part of a group, to have adequate safeguards on the confidentiality and use of information exchanged, including safeguards to prevent tipping-off.
"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," the notification said.
The reporting entity also has 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," the notification said.
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