Gem and jewellery sector is included in Prevention of Money Laundering (Amendment) Bill, 2011

The gem and jewellery sector has been included as one amongst other sectors in the Prevention of Money Laundering (Amendment) Bill, 2011, whose purpose is to curb the practice of money laundering.

The Bill has introduced concepts that pave way for a more thorough compliance and reporting. PMLA Bill, 2011 has introduced the concept of 'Reporting Entity', whereby any person carrying on business in the notified sectors / carrying out designated activities is required to ensure KYC norms in respect of his clients. The Bill further casts certain obligations on the defaulting Board of Directors and Employees of the Reporting Entity and makes them liable for penalty under certain circumstances. The Bill also extends to the corresponding / similar laws of foreign countries. Thus offences under foreign laws are also covered.

The gem and jewellery sector joins Banking, Financial Services and Insurance (BFSI sector), Real Estate, Entertainment (Games of chance) sectors which have also been included under the Bill.

This Bill was passed by both houses of Parliament and amends the Prevention of Money Laundering Act (PMLA), 2002, which was applicable only to banking and financial institutions and intermediaries. The Amendment Bill enlarges the scope and applicability of the Principle Act (2002) and places greater responsibility on the management in terms of compliance and reporting.

Money laundering is explained as the process by which criminally obtained money or other assets (criminal property) are exchanged for ‘clean’ money or other assets with no obvious link to their criminal origins.