PMLA Compliance for Bullion & Jewelry Industry Participants
Here’s how to become PMLA compliant
Guidelines: Policies and Processes to prevent Money Laundering
To combat Money Laundering used for Terrorist Financing Activities, Businesses associated with precious metals and stones are required to have a robust PMLA Compliance Policy in place. The government has laid down the following obligations:
- Policies and Procedures to Combat Money Laundering, Counter Terrorist Financing, and Combat Proliferation Financing (AML/CFT/CPF Program)
- Internal policies, procedures, and controls of the Dealer of precious metals & stones
- Mechanism for information sharing between Industry Councils and Associations and FIU-India
- Appointment of Nodal Officer for the purpose of interaction and information sharing with FIU-India
- Training of employees/staff
- Client Due Diligence (CDD) Norms / Enhanced Due Diligence (EDD) Norms
- Sanctions Screening
Is your Business PMLA Compliant?
Entities need to follow just 4 steps to become PMLA compliant
Step 1
Create a robust AML/CFT/CPF program via a formal policy that has been accepted by management, enabling entities to conduct EDD/CDD for transactions and activities.
Step 2
Training for top management and staff as per requirements to specific business types.
Step 3
Register with FIU-India as per turnover requirements.
Step 4
Sanctions screening to be carried out on customers (current and prospective) as well as suppliers, both at the time of on boarding and when transactions are initiated.
Risks of Non-Compliance
While compliance with the PMLA Act may appear costly, the consequences of non-compliance are far more severe. The financial and reputational risks associated with failing to comply far outweigh the investment in adhering to the regulations.
Regulatory Risk
- Investigation by the Regulatory Authorities and associated costs
- Regulatory penalties
- Termination of business licences and closure
- Personal liability and/or imprisonment
Operational Risk
- Loss of business as companies would not like to deal with non-compliant businesses
- Withdrawal of banking lines and funds on grounds of non-compliance
Reputational Risk
- Adverse publicity
- Damage to reputation and brand image
Penalties
- Imprisonment of 3 – 7 years
- Fines on the percentage of laundered funds
- Temporary or permanent seizure of assets
- Seizure of ill-gotten funds
- Enhanced penalties
What constitutes non-compliance with PMLA?
- Failure to implement required measures and procedures for identifying risks.
- Failure to report suspicious transactions to the Financial Intelligence Unit (FIU) when required.
- Failure to screen customer and transaction databases against names listed on terrorism watchlists.
Our commitment to excellence
FinMet delivers bespoke solutions for industry participants, ensuring smooth compliance with PMLA regulations. Our localized approach simplifies processes, making compliance easy and efficient. Navigate regulatory requirements with confidence!
Be Confident with Compliance
FINMET is backed by a highly skilled team of former bankers, chartered accountants, and ACAMS-certified professionals. With our extensive expertise in AML, KYC, and CFT across the banking and business sectors, we deliver comprehensive and reliable solutions.
Policies: The FINMET team will develop a customized PMLA policy that adheres to all regulations and aligns with global best practices.
Training: Training employees on PMLA compliance is essential for businesses. FINMET’s PMLA Training Modules provide interactive online learning, enabling employees to grasp PMLA requirements and test their understanding through engaging quizzes
ScreenMate: FINMET’s exclusive screening software, ScreenMate, enables you to efficiently screen counterparties, customers, and suppliers across multiple databases. It streamlines compliance processes and enhances security for your business
ScreenMate
The ScreenMate software is built for optimal user experience, featuring an intuitive interface with a straightforward search that allows users to easily enter names of individuals or entities for screening against our extensive database. The software provides instant search results in a time-stamped report format, creating a clear audit trail of the databases searched, ensuring full transparency and accountability. Reports can be conveniently saved and stored for future reference, meeting regulatory requirements for record-keeping.
Key Quality Attributes:
Accurate
Our database is regularly updated to reflect the latest sanctions regulations and lists. We employ rigorous quality control measures to ensure the accuracy and completeness of our data
Precise
Our software utilizes advanced algorithms and matching techniques to identify potential sanctions matches with high precision. We continuously refine our matching capabilities to improve accuracy and reduce false positives.
Up-to-date
We understand the importance of timely updates to our databases. We strive to incorporate new sanctions information promptly to keep our clients informed and compliant.
Reliable
Our software is designed to be robust and reliable. We prioritize system stability and uptime to ensure that our clients can access the information they need, when they need it.
Confidential
We take data privacy and security seriously. Our software is built with robust security measures to protect sensitive information and comply with applicable data protection laws
PMLA Essentials: A Preview
The relevant businesses can be listed as follows:
- Precious Metals Refiners and Processors
- Bullion Traders
- Jewellery Manufacturers
- Jewellery Wholesalers
- Jewellery Retailers (All formats: Online, Chain Stores, Franchises, and Single Stores)
- Diamond Manufacturers and Traders
- Precious Stones Manufacturers and Traders
- Others
- All cash transactions above INR 10 lakhs or equivalent foreign currency
- Sequential/connected cash transactions where monthly aggregate exceeds an amount of Rs. 10 lakhs or its equivalent in foreign currency
- All cash transactions involving forged or counterfeit currency notes
- Suspicious transactions, including attempted transactions, whether or not made in cash
- Transaction of an amount equal to or exceeding rupees fifty thousand (Cash/Bank), whether conducted as a single transaction or several transactions that appear to be connected hence customer Due Diligence (KYC) is Compulsory.
The Directorate General of Audit, Regulator on behalf of Central Board of Excise and Customs (CBIC). Regulator under the aegis of The Department of Revenue, Ministry of Finance (MOF) Government of India. Under MOF,
Enforcement Directorate ED has been given the responsibility to enforce the provisions of the PMLA by conducting investigation to trace the assets derived from proceeds of crime, to provisionally attach the property and to ensure prosecution of the offenders and confiscation of the property by the Special court.
The Financial Intelligence Unit – India (“FIU”) under the Department of Revenue, Ministry of Finance is the central national agency responsible for receiving, processing, analyzing, and disseminating
information relating to suspect financial transactions to enforcement agencies and foreign FIUs. In Simple words FIU will act as a Data Management agency for PMLA
Apart from the ED and FIU, other regulators are empowered to enforce AML guidelines, including:
• SEBI
• RBI
• IRDAI
• Economic Offences Wing, Central Bureau of Investigation (“CBI”)
• Income Tax Department
• Registrar of Companies (“RoC”)
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PMLA Essentials
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What is Dealmate?
Finmet’s DealMate is a software solution designed specifically for the bullion treasury desks of jewellery companies and bullion traders in India. It offers several key features to improve efficiency, accuracy, and control.
- Technical Commentary
- Global & Local Perspectives
- Key Technical Price Levels
- Support & Resistance Zones
- Probable Market Trends
