Role of Financial Intelligence Unit in Restraining Money Laundering and Terrorist Financing Activities

Priyanka Bajpayee

24 Jan, 2020

Financial Intelligence Unit is playing a major role in restraining the Money laundering and terrorist financing activities. Registration of Financial Intelligence Unit is of utmost importance as it serves as a national center for the receipt and analysis of:

1. Suspicious transaction reports; and
2. Other information related to money laundering, Correlated Declared Offences and terrorist financing, and for the publishing of the results of that analysis.

The objective of FIU is to fetch the additional information from reporting entitiesand to get properaccess on a timely basis of the financial, administrative and law enforcement information that is requiredforproper functioning.

Key Considerations

In India, FIU works as the Central National Agency which is accountable for obtaining, processing, analyzing and dispersing the information related to the doubted financial Transactions.

Below mentioned are major considerations to shape the creation of the FIUs:

• Anti-money laundering and
• Counter-terrorism financing laws, existing law enforcement, and the need for an authority that will be obtained, evaluate and share financial information.

FIU Registration in India

Acting as the Central National Agency, Financial Intelligence Unit – India (FIU-IND) is responsible for obtaining, measuring, analyzing and publishing information relating to doubtful financial transactions.

FIU-IND is an intelligence agency that is responsible for uplifting and building the efforts of national and international intelligence in chasing the efforts against money laundering and terrorism financing. The reporting of FIU-IND is direct to the Economic Intelligence Council (EIC) directed by the Finance Minister.

The need for registration is in momentum just after the FIU-IND released a list of –

• Non-compliant NBFC’s for not registering them and
• Designated Principal Officer of NBFC under PML Act, 2002 and PML rules with the agency.

Therefore, for removing the loophole, every non-compliant NBFC is trying to register themselves and their designated principal officer with the agency.

The authorized users for the Portal are –

• Principal Officer and 
• Other users which include supervisor to principal officer, alternate principal officer, technical person, trainer and other users.

Process and details required for FIU-IND registration

The registration process requires the submission of basic information of the user or reporting entity. 

The 3 steps registration process to register as the new user is:

1. Reporting Entity selection
2. Principal Officer registration
3. Other User registration

Selection of Reporting Entity

• Log into FIN network Gateway
• For fresh registration, register as a new user.
• Search by providing FIU reporting entity ID (FIUREID). FIU-IND provides to each reporting entity a 10-digit unique number.
• Selection of details of the reporting entity for moving to the next stage.
• In case of non-availability, the user has to submit the basic details of the reporting entity.
• Provide the basic details such as the name of thereporting entity,category, and details of the user.
• The system on submission of the requisite details will display the following message:

• The registration request number needs to be mailed by the user at ctrcell@fiuindia.gov.inand the hard copy may be posted tothe Director,Financial Intelligence Unit-India, 6th Floor, Hotel Samrat, New Delhi 110021.

• The intimation shall be sent to the user via email, once FIUREID has been allotted. Further, once the intimation is received user can move to the next step of registration.

Registration of Principal Officer

• Once the reporting entity is selected, every reporting entity needs to appoint a person as Principal officer under 2 (1) (f) of the rules. Below mentioned are the steps required to register the Principal Officer:
• Selection of Reporting entity from the list,
• For registration, Submit details of Principal Officer from the dropdown list.
• Once the details are filed, User registration request number is generated with the following message:

• The signed copy of the Principal Officer registration request number shall be duly stamped and countersigned by the supervisor of Principal officer and sent via  email at ctrcell@fiuindia.gov.in .It can also be sent via post to Director Financial Intelligence Unit-India, 6th Floor, Hotel Samrat, New Delhi 110021.
• Once approval is given by the authority, log in and Password will be mailed to the Principal Officer.

Other users Registration

The registration process of other users shall be initiated by the Principal Officer of the reporting entity only. A Signed copy of the Registration request is to be submitted to FIU-IND. The details provided for registration shall be approved by the User Admin of FIU-IND.Once the approval is granted by the FIU-IND, the user will receive login ID and password via mail provided at the time of registration.

FIU-IND as a Central Repository

In India, FIU-IND acts as a central repository which initiates and maintains the National data based on transactions which are either cash related or suspicious. The basis of maintaining the data are the reports received from the reporting entities.

Structure of FIU

The structure of FIU comprises of different directors i.e.

• Additional Directors/Joint Directors,
• Deputy Directors/Assistant Directors,
• Additional Directors, Deputy Directors, Assistant Directors and Section Directors (For Administration),
• Technical Director/Joint Directors, Deputy Directors, Assistant Directors and Technical Assistants(System)

Takeaway

FIU is playing a vital role in restraining the in restraining the Money laundering and terrorist financing activities. The nature of the FIU is administrative and to enforce the laws. The major role played by the FIU in India is to collect and analyze the information which are suspicious and related to money laundering and the crimes related to it.