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

Rohan Nair is the designated director of a finance company in GIFT IFSC. The company has detected a series of cash-like transfers that appear structured to avoid reporting thresholds. Under the anti-money laundering framework applicable in the IFSC, what is the most appropriate step for the entity?

The entity should report the suspicious transactions to the Financial Intelligence Unit-India through its principal officer and preserve the records. Delaying, deleting records or telling the customer would breach reporting, record-keeping and anti-tipping-off requirements under the anti-money laundering framework.

  1. AWait until the customer's annual review and then decide
  2. BReport the suspicious transactions to the Financial Intelligence Unit-India through its principal officer, and keep recordsCorrect
  3. CClose the account silently and delete the transaction records
  4. DInform the customer so that the pattern can be explained

Explanation

Regulated entities must report suspicious transactions to FIU-IND through the principal officer and retain records. Waiting delays reporting, deleting records breaches record-keeping, and informing the customer is tipping off, which is prohibited.

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