Attempt to eradicate malpractices from GJ Sector!

Dec 05, 2023

“This is a welcome move and a much-needed one for the sanity of India’s gems & jewellery (GJ) sector. The disclosures of Ultimate Beneficial Owners (UBOs) by their trading partners will ensure the last-mile eradication of malpractices like money laundering and terror funding.

Along with this, it will also safeguard the interests of exporters and other ancillaries of the industry. Overall, this is a win-win move that will also boost the confidence of overseas players to do hassle-free business in India, thereby enhancing the foreign currency inflow in the country” said Colin Shah, MD, Kama Jewelry at the occasion.

Ultimate Beneficial Ownership (UBO) is the individual or entity that ultimately owns or controls a company, partnership, trust, or other legal entity. UBO identification is a critical component of Know Your Business (KYB) and Know Your Customer (KYC) processes, and financial institutions such as banks, investment firms, and insurance companies are required by regulators to identify and verify the UBOs they do business with.

Previously, the GJEPC had explained through, MyKYCBank of G&J KYC Information Centre; why, it is a mandatory disclosures of UBO for Gem & Jewellery Sector, and said, according to World Bank and The Financial Action Task Force (FATF) (FATF is an inter-governmental organization founded in 1989 and is responsible for developing policies to combat money laundering and terrorist financing.) had identified our sector (Dealers in Precious Metals and Stones) as a DNFBP (Designated Non-Financial Business or Profession).

And FATF has recommended following measures for DNFBPs, 1: Customer due diligence is mandatory (including beneficial owner), 2: Implement an AML/CFT program with a risk based approach, 3: Enhanced due diligence based on risk assessment & country risks & 4: Transactions to be scrutinized regularly and reporting of suspicious & cash transactions.

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