Monday, June 5, 2023
HomeBusinessChartered Accountant CS handling client's financial transactions comes under PMLA law

Chartered Accountant CS handling client’s financial transactions comes under PMLA law

PMLA: The government has tightened its noose on chartered accountants, company secretaries and cost accountants who transact for their clients. Under the new rule, Chartered Accountants, Company Secretaries and Cost Accountants can now be held accountable under the PMLA (Prevention of Money Laundering Act) law on certain types of financial transactions on behalf of their clients.

The Finance Ministry has issued a notification, according to which it has been said to keep CA, CS and Cost Accountant under the ambit of PMLA for five types of financial transactions. Accordingly, their role in managing bank accounts on behalf of their customers and sale and purchase of their properties will be examined within the ambit of the PMLA law.

Management of money, securities or other assets of customers other than purchase and sale of immovable property, management of bank, savings or securities accounts, formation, operation or management of companies, supervision of contributions to companies, LLPs or trusts, according to the notification. Financial transactions related to the purchase and sale of business units with the formation, operation or management of companies have been kept under the purview of the PMLA. According to this notification, Chartered Accountants along with their clients will themselves be equally liable for punishment and fine under the PMLA Act, 2002.

Both the client and the Chartered Accountant will be equally liable if the provisions of the PMLA Act are invoked. If a chartered accountant feels that the provisions of the PMLA (Prevention of Money Laundering Act) have been violated in any transaction, he can now inform the regulators about it.

ICAI, a body of chartered accountants, said in a statement that after this notification, chartered accountants have now become a source of information on certain types of transactions. But for this role, he will have to keep complete records of all the transactions, apart from keeping KYC of the customers.

The government is continuously working to make the PMLA provisions stricter to curb black money. In March also, the Finance Ministry had made it mandatory for banks and financial institutions to keep details of financial transactions of politically connected people.


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