Financial Intelligence Unit Current Affairs - 2020

FIU to get PAN data from Income Tax Department to check suspicious large transactions

The Financial Intelligence Unit is the nodal agency authorized to obtain cash transaction reports from private and public sector banks. The FIU receives reports every month to analyse suspicious cases.

Highlights

This time, the Income Tax Department has allowed to share PAN details of individuals to dig deeper into large suspicious accounts. FIU forwards suspicious accounts to law enforcement, intelligence agencies and investigative agencies of GoI. This will help to check possible instances of tax evasion, money laundering and terror financing.

Prevention of Money Laundering Act

The FIU is empowered to receive Cash Transaction Reports (CTR) under the Prevention of Money Laundering Act. A bank has to furnish CTR to FIU every month incorporating all transactions over Rs 10 lakhs.

What is the issue?

Disclosing PAN will help FIU to get bigger picture of money laundering and tax evasion. There are cases where numerous small transactions take place without mentioning PAN. The money launders use these short cuts to get tax evasion. Such situations can now be avoided.

Financial Intelligence Unit

The FIU was set up by India in 2004 as the central national agency responsible for receiving, processing, analyzing and disseminating information related to suspicious financial transactions. The FIU is an independent body that reports to the Economic Intelligence Council that is headed by the Finance Minister.

What is ‘goAML’ launched by UAE?

The United Arab Emirates (UAE) has become 1st country in Gulf to launch new anti-money laundering platform called ‘goAML’ (Anti-Money Laundering). It is a one-stop solution, launched by UAE to crack down on organised financial crimes.

All about goAML

Developer: It is the new anti-money laundering platform was launched by UAE’s Financial Intelligence Unit (FIU) and is developed by United Nations Office on Drugs and Crime (UNODC) to curb organised crimes.

Features:

It is a fully integrated software solution developed for use by UAE’s FIU. It is being considered as one of the UNODC’s strategic responses to financial crime, such as money laundering and terrorist financing.

It can be used for data collection, document management and analysis and will be used by financial institutions (like banks, finance companies) and law enforcement agencies such as police and designated non-financial businesses and professions (lawyers, accountants).

The platform is specifically customized to help FIU meet requirements of UAE’s Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) framework and other illicit financial activities.

goAML will facilitate the receipt, analysis and dissemination of suspicious transactions and activity reports.

Compulsory Registration: As per officials of UAE’s Central Bank (in Abu Dhabi) ‘goAML’ has been open for registration since May and all financial entities and Designated Non-Financial Businesses or Professions have to register on this new reporting platform system by 27 June 2019.

Over 900 entities including, banks, insurance companies and money exchange centres are required to register on goAML platform (nearly 50% of them have already registered).

Significance: This new system ensures that UAE financial system remains effective in fight against money laundering and terrorist financing.

About Financial Intelligence Units

Worldwide, FIUs play a leading role in prevention of anti-money laundering (AML) and counter-terrorist financing (CTF) activities.

Function: They receive, process, and analyze reports made by financial institutions or other entities in accordance with requirements of domestic AML/CTF laws and regulations.