An Overview of Financial Intelligence Unit Registration Financial Intelligence Unit registration is a mandatory provision for every reporting entity to obtain in order to furnish information to the Director of FIU-IND in the prescribed format. Financial Intelligence Unit India, or FIU-IND, was established by the government of India on November 18, 2004, to act as a central national agency responsible for scrutinizing and receiving information connected to suspected financial transactions. Its primary objective is to strengthen the efforts of national and international intelligence, investigations, and various other enforcement agencies to combat illegal activities like money laundering and financing of terrorism, subsequently safeguarding the national economic integrity and security. On 4th July 2023, the Ministry of Finance, through its notification, made FIU-IND mandatory registration for Virtual Digital Assets service providers to obtain an FIU-IND registration. According to the notifications, the VDA service providers must comply with the provisions of PMLA, PML rules, and the AML-CFT guidelines before proceeding with the financial intelligence unit registration (FIU-IND). What is Financial Intelligence Unit India? A Financial Intelligence Unit India is an organization under the Department of Revenue, Government of India, which is authorised to collect financial intelligence about offences under the Prevention of Money Laundering Act, 2002. The Financial Intelligence unit is also responsible for coordinating and strengthening efforts of both national and international intelligence, investigations, and enforcement agencies in pursuing global efforts to combat money laundering and related crimes. Who is the Reporting Entity under FIU-IND? The reporting entity under FIU-IND is the designated business or profession as specified under section 2(wa) of the Prevention of Money Laundering Act, such as a banking company, financial institution, intermediaries, or person engaged in the professions as per the Prevention of Money Laundering Act. The government of India has also included the VDA service provider or virtual digital assets as reporting entities under FIU-IND. According to the PMLA, reporting entities have to comply with KYC directions as laid down by the Reserve Bank of India. Thus, FIU-IND KYC registration is a mandatory rule for a smooth transaction. Similarly, FIU registration for NBFCs is also a mandatory obligation for the smooth functioning of NBFC banking operations. What are the Functions of Financial Intelligence Unit India? Financial Intelligence Unit India is an independent body authorised to report directly to the Economic Intelligence Council (EIC) headed by the Ministry of Finance. Below are its functions- 1. Collection of Information The organisation is responsible for collecting reports on cash transactions, financial transactions carried out by non-profit organisations, reports related to international wire transfers, reports on the purchase of immovable properties in India, and different forms of suspicious transaction reports (STR) from various reporting entities. 2. Analysis of Information The financial intelligence unit India analyses different transactions in India to understand the suspected money laundering circumstances. 3. Sharing the Information The collected information is shared with other regulatory agencies, such as the national intelligence/law enforcement agencies, national regulatory authorities, and foreign Financial Intelligence Units. 4. Acts as a Central Repository FIU-IND acts as a central repository for all forms of financial transactions and accounting reports in India. Reporting aspects related to the RBI, Banks, and other institutions would go directly to the FIU-IND. 5. Coordinating with Other Agencies The unit coordinates with other institutes at a regional, national, and international level to improve the performance of suspected financial activities in India. 6. Research and Development Apart from this, the unit also conducts research on money laundering, terrorist financing and other areas. Financial Intelligence Unit India Compliance Requirement Before contacting the FIU-IND for registration, the reporting entity must ensure that they have followed all applicable requirements under the PMLA, PML Rules, and AML-CFT guidelines. The list of financial intelligence unit India compliance requirements is as follows: A brief overview of the service provider's nature should be included, along with a clear explanation of how its operations fall within the purview of those allowed by the Department of Revenue, Government of India notification dated March 07, 2023. Describe in brief the company's organisational structure and the extent of its important beneficiary ownership. Copies of the company's or LLP's incorporation documents, annual report, balance sheet, and profit and loss account have been submitted to the Ministry of Corporate Affairs for the previous three fiscal years. Copies of the company's last three years' worth of GST returns and copies of its registrations with the GST authorities in each state where it operates serve as official documentation of the type of business the organisation engages in. Copy of Form-26Q/26QF/26QE and Income Tax Returns submitted to the Income Tax Department for TDS on VDA transactions. Copies of the agreement and the nature of the relationship are required if the entity is involved in any form of arrangement with an organisation based in India or beyond India exchange regarding the activities covered above. Any additional information or document must be provided and promptly communicated to the reporting entity, as well as any further information or document that the reporting entity may wish to disclose to guarantee that the registration process is completed. Documents Requirements for FIU IND Registration The reporting entities seeking to obtain registration with FIU-IND must be equipped with the mandatory documents. Given below is the list of FIU India registration checklist for mandatory documents: For Individual One certified copy of an officially valid document containing identity and address details is required. Any identification Documents One recent photograph Such other Documents, including in respect of the nature of business and financial status of the client as may be required by the reporting entity For Company Certificate of Incorporation (COI)/MOA & AOA of Company Resolution from BOD and POA granted to its managers, officers or employees to transact on its behalf Officially valid Document for managers, officers or employees holding an attorney to transact on its behalf. For Partnership Firm Registration Certificate Partnership Deed An officially valid Document for the person holding an attorney to transact on its behalf. For Trust Registration Certificate Trust Deed An officially valid document concerning the person holding an attorney to transact on its behalf. For UIB/BOI Resolution of the managing body of such association or body of individuals POA granted to him to transact on its behalf An officially valid Document in respect of the person holding an attorney to transact on its behalf Such information may be required by the reporting entity to collectively establish the legal existence of such association or Body of Individuals (BOI). Now, let’s move to the FIU-IND Registration Process in brief. Financial Intelligence Unit India Registration Process The Financial Intelligence Unit India Registration Process under the Financial Intelligence Unit India includes the registration of the reporting entity and registration of the principal officer. The steps to register with FIU-IND are described below- 1. Registration of Reporting Entity The first step is to file Financial Intelligence Unit India registration form with the FIU—IND by the reporting Agency. After this, the applicant needs to submit the application with the necessary Documents. Finally, the applicant will receive the certificate of registration issued by the authority only after the application is verified. 2. FIU India Principal Officer Registration The FIU India principal officer registration can be done only after the reporting entity's registration. For this registration, the applicant needs to apply with the details of the principal officer. Next, the applicant must apply with the necessary Documents for scrutiny before the concerted authority. After being satisfied with the paperwork, the authority will issue the certificate of registration. Consequences of Non-Compliance with FIU-IND FIU-IND reporting entity registration is a necessary provision and thus the same has to comply. Below is the list of consequences of non-compliance with FIU-IND. Issuance of a direction to a reporting entity to adhere to the specific instructions. Issuance of warning Issuance of a direction to a reporting entity to send reports at particular intervals as regards measures being taken to observe adherence. A monetary fine is being applied to the reporting entity. Reports to be Submitted under the FIU-India Under the PMLA and respective rules, different forms of reports must be submitted by the reporting entities. The following are the types of reports which have to be submitted under FIU-India: Cash Transaction Report (CTR) Suspicious Transaction Report (STR) Counterfeit Currency Report (CCR) Cross-Border Wire Transfer Report (CBWTR) Report on sale/purchase of immovable property The following table shows the due date and periods of submission of reports: S.No. Report Description Due-date 1. CTR Rs.10 Lakh or more. 15th day of succeeding month 2. CCR Forged or counterfeit currency. 15th day of succeeding month 3. NTR All transactions involved receipts by the NPO of a value of more than Rs.10 Lakh. 15th day of succeeding month 4. CBWTR Cross-Border Transfer Rs. 5 lakhs or more. 15th day of succeeding month 5. Immovable Property Sale purchase of immovable property valued exceeding Rs. 50 lakh or more. 15th day of the month succeeding the quarter 6. STR All suspicious transactions, whether or not made in cash. Not later than seven working days on being satisfied that the transaction is suspicious FIU India Registration Fee The fees for obtaining a registration from FIU India is around Rs. 25,000/- (Twenty-five Thousand). This fee includes both professional charges and documentation. Timeline For Financial Intelligence Unit Registration The timeline for obtaining a registration from the Financial Intelligence Unit India is around 8 to 9 months. Why Choose Enterslice? There are various reasons to consider Enterslice when registering with a Financial Institution (FIU) in India, such as: Expertise We have extensive experience with FIU-IND compliance registration, financial institutions' registration and various other compliance requirements. Our team of professionals can offer customised guidance to guarantee a seamless process because we are knowledgeable about the legal framework of FIU-IND. Efficient Process Our efficient process can greatly reduce the time and effort needed for FIU-IND user registration. We know the necessary procedures and documentation, so we ensure that common mistakes are prevented and the approval process is speeded up. Regulatory Compliance Enterslice ensures that every part of FIU India registration guidelines are followed and avoid legal complications. Dedicated Support Our customers receive ongoing FIU-IND registration support from start to finish during. This involves helping with paperwork, communicating with regulatory organizations, and handling any questions or worries that might come up. Transparent Pricing We offer pricing that is clear and free of hidden fees. Customers can anticipate transparent communication about the costs, which helps in budgeting and preparing for the registration procedure.
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