What changed
RBI issued a circular on May 20, 2011, referencing a February 25, 2011 FATF statement, requiring Indian agents to apply counter-measures for cross-border inward remittances from Iran and DPRK. This follows an earlier April 6, 2011 circular on AML/CFT deficiencies in these jurisdictions.
What it means for you
Indian agents handling money transfers must now treat remittances from Iran and DPRK with heightened scrutiny, implementing FATF-recommended counter-measures. Non-compliance risks penal action under FEMA and PMLA, increasing operational and legal exposure for banks and authorized persons.
What you must do
- Review the enclosed FATF statement and update AML/CFT policies for Iran and DPRK transactions.
- Ensure Principal Officer acknowledges receipt of this circular.
- Communicate these requirements to all constituents and customers involved in cross-border remittances.
- Strengthen monitoring and reporting mechanisms for inward remittances from these jurisdictions.
Who it affects
All Authorised Persons acting as Indian Agents under Money Transfer Service Scheme, Banks and financial institutions handling cross-border inward remittances, Compliance and AML/CFT teams in Indian banks
What specific counter-measures does the FATF statement require?
The circular does not detail the counter-measures; it advises agents to consider the information in the enclosed FATF statement. Agents should refer to the FATF statement for specific actions.
Does this circular apply to all remittances or only those from Iran and DPRK?
It specifically addresses risks from Iran and DPRK, as highlighted by FATF. Agents must apply counter-measures to protect the financial system from ML/FT risks emanating from these two countries.
What are the penalties for non-compliance?
Non-compliance attracts penal provisions under FEMA 1999, PMLA 2002, and related rules, as amended. Specific penalties are not listed in this circular.