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February 2011

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 (Amendmen

By Pinky Shah, Sonalee Godbole, Gaurang Gandhi, Tarun Ghia, Brijesh Cholera, Pratik Mehta | Chartered Accountants
Sejal Vasa | Company Secretary
Reading Time 2 mins
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Part C : RBI/FEMA


Given below are the
highlights of certain RBI Circulars.

52 A.P. (DIR Series)
Circular No. 26,

dated 22-12-2010

A.P. (FL/RL Series) Circular
No. 7,

dated 22-12-2010

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

Attached to this Circular is
a Statement dated June 25, 2010 issued by the Financial Action Task Force (FATF).
This Statement divides the strategic AML/CFT deficient jurisdictions into two
groups as under :

(a) Jurisdictions against
whom countermeasures are required to be applied to protect the international
financial system from the ongoing and substantial money laundering and
terrorist financing (ML/TF) risks — Iran.

(b) Jurisdictions with
strategic AML/CFT deficiencies that have not committed to an action plan
developed with the FATF to address key deficiencies as of June 2010 —
Democratic People’s Republic of Korea (DPRK), Sao Tome and Principe.

This Circular advices
Authorised Persons to take into account risks arising from the deficiencies in
AML/CFT regime of these countries, while entering into business relationships
and transactions with persons (including legal persons and other financial
institutions) from or in these countries/jurisdictions.

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