Chartered Accountants Become Reporting Agencies After Tweak In Anti-Money Laundering Law: Report

May 5, 2023

Chartered accountants, company secretaries and works accountants who buy property, establish a company and execute financial transactions on behalf of their clients will now be covered under the anti money laundering law after Finance Ministry notified changes to the Prevention of Money Laundering Act (PMLA), 2002, widening its lens to include several transactions facilitated by professionals.

Chartered accountants, company secretaries, and works accountants will need to examine ownership and financial position including clients' sources of funds.

The amendments have been made in the sub-clause (vi) of clause (sa) of sub-section (1) of Section 2 of the PMLA, which defines 'relevant persons' and firms covered under the anti-money laundering law. Earlier, the act did not include these professionals. Now, chartered accountants, company secretaries and cost and works accountants have become ‘reporting entities’, The Economic Times reported.

The professionals will now be responsible for activities on behalf of clients such as buying and selling of any immovable property, managing assets, creation, operation or management of companies, limited liability partnerships or trusts, and buying and selling of business entities.

[Outlook India]