Financial Intelligence Unit (FIU) notified alert indicators on anti-money laundering

Posted 29 Apr 2024

2 min read

Fresh set of alert indicators have been issued for capital markets, insurance companies, online payment gateway intermediaries, and crypto service providers to address emerging risks in market infrastructure institutions.
- It has been issued under the provisions of the Prevention of Money Laundering Act (PMLA), 2002.
Money laundering is any process or activity connected with the proceeds of crime including its concealment, possession, acquisition, or use and projecting or claiming it as untainted property. (PMLA, 2002)

Key highlights on the indicators
- Mandates Stock Exchanges to consider suspicious cases of mis-utilization of client funds by stockbrokers and analyze cases of "serious anomalies" from the perspective of money laundering and terrorism financing.
- Alert indicators for virtual digital asset (VDA) or crypto currency service providers range from directions to register with FIU to carrying out "enhanced due diligence to implementation of travel rule."
  - Travel Rule, extended to crypto companies in 2019 by FATF, requires businesses to collect and share the personal data of participants in a transaction.
- For credit rating agencies (CRAs), new guidelines will ensure timely reporting of suspicious transactions to FIU to identify serious corporate frauds.

Established: In 2004
An independent body reporting directly to Economic Intelligence Council (EIC) headed by the Finance Minister
Functions: Central national agency responsible for receiving, processing, analyzing and disseminating information relating to suspect financial transactions.
- It is also responsible for coordinating and strengthening efforts of national and international intelligence, investigation and enforcement agencies in pursuing global efforts against money laundering and terror financing.

Specialized Agencies: Directorate of Enforcement (ED), Central Bureau of Investigation (CBI), etc.
International Cooperation: India is a member of Financial Action Task Force (FATF) and Eurasian Group on Combating Money Laundering and Financing of Terrorism.

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