Definitions under PMLA Act 2002

Definitions
Rule 2 of the Prevention of Money-laundering (Maintenance of Records Rules, 2005 lays down following definitions.

Definitions

(1) In these rules, unless the context otherwise requires, -

(a) "Act" means the Prevention of Money-laundering Act, 2002 (15 of 2003);

(b) “client due diligence” means due diligence carried out on a client referred to in clause (ha) of sub-section (1) of section 2 of the Act;

(ba) “Designated Director” means a person designated by the reporting entity to ensure overall compliance with the obligations imposed under Chapter IV of the Act and the Rules and includes—(ba) “Designated Director” means a person designated by the reporting entity to ensure overall compliance with the obligations imposed under Chapter IV of the Act and the Rules and includes—

(i)the Managing Director or a whole-time Director duly authorized by the Board of Directors if the reporting entity is a company,

(ii)the managing partner if the reporting entry is a partnership firm,

(iii)the proprietor if the reporting entity is a proprietorship concern,

(iv)the managing trustee if the reporting entity is a trust

(v)a person or individual, as the case may be, who controls and manages the affairs of the reporting entity if the reporting entity is an unincorporated association or a body of individuals, and

(vi)such other person or class of persons as may be notified by the Government if the reporting entity does not fall in any of the categories above.

 Explanation.—For the purpose of this clause, the terms “Managing Director” and “Whole-time Director” shall have the meaning assigned to them in the Companies Act, 1956 (1 of 1956);

(bb) “Designated Officer” means any officer or a class of officers authorized by a banking company, either by name or by designation, for the purpose of opening small accounts.

(c) “Director” means the Director appointed under sub-section (1) of section 49 of the Act for the purposes of sections 12, 12A and 13 of the Act;

(ca) “non profit organisation” means any entity or organisation that is registered as a trust or a society under the Societies Registration Act, 1860 (21 of 1860) or any similar State legislation or a company registered under section 25 of the Companies Act, 1956 (1 of 1956);

(d) “officially valid do(d) “officially valid document” means the passport, the driving licence, the Permanent Account Number (PAN) Card, the Voter’s Identity Card issued by Election Commission of India, job card issued by NREGA duly signed by an officer of the State Government, the letter issued by the Unique Identification Authority of India containing details of name, address and Aadhaar number or any other document as notified by the Central Government in consultation with the Regulator:
Provided that where simplified measures are applied for verifying the identity of the clients the following documents shall be deemed to be officially valid documents:—

(a)identity card with applicant's Photograph issued by Central/State Government Departments, Statutory/Regulatory Authorities, Public Sector Undertakings, Scheduled Commercial Banks, and Public Financial Institutions;

(b)letter issued by a gazetted officer, with a duly attested photograph of the person.

(e) "prescribed value" means the value of transaction prescribed under these rules;

(f) “Principal Officer” means an officer designated by a 1[reporting entity];

(fa)“Regulator” means a person or an authority or a Government which is vested with the power to license, authorise, register, regulate or supervise the activity of 3[reporting entities or the Director as may be notified by the Government for a specific reporting entity or a class of reporting entities or for a specific purpose;

(faa) “Rules” means the Prevention of Money-laundering(faa) “Rules” means the Prevention of Money-laundering (Maintenance of Records) Rules, 2005;

(fb) “small account” means a savings account in a banking company where—

(i) the aggregate of all credits in a financial year does not exceed rupees one lakh,

(ii) the aggregate of all withdrawals and transfers in a month does not exceed rupees ten thousand, and

(iii) the balance at any point of time does not exceed rupees fifty thousand.

(g) "suspicious transaction" means a transaction i> whether or not made in cash which, to a person acting in good faith-

(a) gives rise to a reasonable ground of suspicion that it may involve proceeds of an offence specified in the Schedule to the Act, regardless of the value involved; or

(b) appears to be made in circumstances of unusual or unjustified complexity; or

(c) appears to have no economic rationale or bonafide purpose; or

(d) gives rise to a reasonable ground of suspicion that it may involve financing of the activities relating to terrorism;



1[Explanation.—Transaction involving financing of the activities relating to terrorism includes transaction involving funds suspected to be linked or related to, or to be used for terrorism, terrorist acts or by a terrorist, terrorist organisation or those who finance or are attempting to finance terrorism.]

2[(h) “transaction” means a purchase, sale, loan, pledge, gift, transfer, delivery or the arrangement thereof and includes—

(i) opening of an account;

(ii) deposits, withdrawal, exchange or transfer of funds in whatever currency, whether in cash or by cheque, payment order or other instruments or by electronic or other nonphysical means;

(iii) the use of a safety deposit box or any other form of safe deposit; (iv) entering into any fiduciary relationship;

(v) any payment made or received in whole or in part of any contractual or other legal obligation;

(vi) any payment made in respect of playing games of chance for cash or kind including such activities associated with casino; and

(vii) establishing or creating a legal person or legal arrangement.]

(2) All other words and expressions used and not defined in these rules but defined in the Act shall have the meaning respectively assigned to them in the Act