Govt amends money laundering law to cover transfer services, credit cards

The Government of India on 06 June 2008 announced that it has decided to amend the Prevention of Money Laundering Act (PMLA). According to the proposed amendment, financial intermediaries including casinos, credit card payment gateways run by MasterCard and Visa and money changers and transfer service providers such as Western Union, would be required to compulsorily report all suspicious transactions involving international transfers. The move was aimed to stop the increasing use of these payment gateways for laundering terror money and for under-voicing export bills by certain traders. The amendment would also add a class of offences with cross-border implication to inhibit fund transfer connected to international crimes.

Prior to this amendment, only banks and other financial institutions had to report any suspicious transaction to the Financial Intelligent Unit, set up under the purview of the Finance Ministry. Information and Broadcasting Minister Priyaranjan Dasmunsi said “The amended bill will enable the Government of India to meet certain domestic needs and international obligations.” (*The Prevention of Money Laundering Act came into effect from 2002, for bringing global money transfer operators under the control of Reserve Bank of India. Amendments to the Act were made based on the suggestions given by the Financial Action Task Force, an intergovernmental organisation established by the Group of Seven countries for preventing money laundering and terrorist financing.)