CIRCULAR
F. No. 822/IFSCA/FATF-C/Legal/2022-23/02
12th October 2023
To,
All the Regulated Entities in the International Financial Services Centre (IFSC)
Subject: Modifications under the International Financial Services Centres Authority
(Anti Money Laundering, Counter-Terrorist Financing and Know Your Customer)
Guidelines,
2022
for
specifying
additional
AML/CFT/KYC
measures
and
clarifications.
A.
Reference is drawn to the International Financial Services Centres Authority (Anti
Money Laundering, Counter-Terrorist Financing and Know Your Customer)
Guidelines, 2022 (hereinafter referred as ‘Guidelines’) issued vide notification
IFSCA/2022-23/GN/GL001 dated October 28, 2022, by the International Financial
Services Centres Authority (hereinafter referred as ‘Authority’).
B.
In the aforesaid Guidelines, the Authority hereby specifies the following modifications:
1. In clause 1.3.38 of the Guidelines, after the words ‘effective supervision.’ the
following explanation shall be inserted:
“Explanation: Physical presence means meaningful mind in the form of
senior management located within an IFSC. The existence simply of a
local agent or low-level staff does not constitute physical presence.”
2. After point (ii) of clause 5.4.9 of the Guidelines, the following point shall be
inserted, namely:
“(iii) in relation to life insurance policies, the Regulated Entity should be
required to take reasonable measures to determine whether the
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beneficiaries and/or, where required, the beneficial owner of the
beneficiary, are PEPs. This should occur, at the latest, at the time of the
payout. Where higher risks are identified, financial institutions should be
required to inform Senior Management before the payout of the policy
proceeds, to conduct enhanced scrutiny on the whole business
relationship with the policyholder, and to consider making a Suspicious
Transaction Report.”
3. After sub-clause (b) of clause 5.6 of the Guidelines, the following sub-clause shall
be inserted, namely:
“(c) The Regulated Entities shall specifically apply enhanced due
diligence measures, proportionate to the risks, to business relationships
and transactions with natural and legal persons (including financial
institutions) from countries for which this is called for by the FATF.”
4. After clause 7.2 of the Guidelines, the following clause shall be inserted, namely:
“7.2A. The Regulated Entity shall verify the information pertaining to its
customer where there is a suspicion of ML/TF.”
5. In sub clause (b) of clause 7.7.6 of the Guidelines, after the words ‘at least six
years’ the words “or for such period as prescribed under the applicable laws” shall
be omitted;
6. In sub-clause (b) of clause 10.4 of the Guidelines,
(a)
in point (iii) after the words ‘(to enable it to carry out its supervisory role);’
the words “or” shall be omitted.
(b)
in point (iv) after the words ‘with the court order’ the words ‘; or” shall be
inserted.
(c)
after point (iv), the following point shall be inserted namely:
“(v) disclosure or information sharing among entities in a Financial
Group.”
C.
All other provisions specified in the Guidelines and any circulars issued thereunder
from time to time shall remain unchanged.
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D.
Copy
of
the
circular
is
available
on
the
IFSCA
website
at
https://ifsca.gov.in/Legal/Index/TCce8MyOmco=
Ramachander S.S.R. Eranki,
Head, AML & CFT Division,
ramachander.essr@ifsca.gov.in
