Politically exposed persons, NPOs face tighter PMLA regulations

Reporting cap for beneficial owners lowered to 10%

Tightening its oversight of non-profit organisations (NPOs) and politically exposed persons (PEPs), the government has lowered the threshold for reporting “beneficial ownership” in an entity to 10 per cent from 25 per cent under anti-money laundering laws.

Under the Prevention of Money Laundering Act (PMLA), a “beneficial owner” is defined as an individual who owns or controls those engaged in financial transactions with a reporting entity.

Further, it has expanded the due diligence requirement for these two entities. These include submitting details such as the names of persons holding senior management positions, partners, beneficiaries, trustees, settlers, and authors, as the