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ARTICLE · 21 JUNE 2024

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Significance Of Beneficial Ownership Under PMLA

Kochhar & Co.
Kochhar & Co.
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Kochhar & Co.

Kochhar & Co.

Kochhar & Co has one of the largest full service commercial law practices in Bangalore. The firm...

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The Prevention of Money-Laundering Act, 2002 ("PMLA Act") and the rules thereunder govern the activities relating to money laundering in India.

IndiaGovernment, Public Sector
Anuj Kaila
Anuj Kaila
Mansi Patel
Mansi Patel
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INTRODUCTION

The Prevention of Money-Laundering Act, 2002 ("PMLA Act") and the rules thereunder govern the activities relating to money laundering in India. In the year 2023, the Ministry of Finance notified the amendments to the Prevention of Money Laundering (Maintenance of Records) Rules, 2005, on 07 March 2023, 04 September 2023 and 17 October 2023 ("PMLA Rules"). One of the key provisions of the PMLA Rules relates to identifying and verifying the identity of clients of the reporting entities (please refer to the meaning of 'reporting entities' below), understanding the ownership and control of the client entity and tracing the beneficial owner of such entity.

In this Article, we have discussed the increasing compliance requirements relating to beneficial ownership, recent amendments to the PMLA Rules in this regard and the impact of the amendments to the PMLA Rules on Indian entities and foreign shareholders.

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