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CS Professional · IFSCA - Regulations, Listing and Compliances · Book-keeping, Accounting, Taxation and Financial Crime Compliance Services and TAS

Kaveri Tax Partners, an IFSCA-registered service provider in GIFT IFSC, advises a client unit on its tax position. The client asks Kaveri to also act as an unregulated shell channel to route its funds to avoid scrutiny. Which is the correct regulatory position?

Kaveri must decline. A registered taxation service provider in the IFSC is subject to anti-money laundering and financial crime compliance obligations, so it cannot help route funds to evade scrutiny, and later disclosure or the client's IFSC status does not make it permissible.

  1. AKaveri may agree, as tax advisers are not subject to financial crime compliance duties
  2. BKaveri may agree if the fee is disclosed to IFSCA after the engagement
  3. CKaveri may agree if the client is a unit in the IFSC
  4. DKaveri must decline, as a regulated provider must follow AML/CFT and financial crime compliance requirements and cannot facilitate evasionCorrect

Explanation

Service providers in this chapter are bound by financial crime compliance expectations, including AML/CFT obligations. Facilitating concealment of funds breaches these duties, so it must be declined; later disclosure or the client's IFSC status does not cure it.

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