The newly created Directorate General of Goods and Service Tax Intelligence (GSTI) has been named the regulator responsible for money laundering and terrorist financing in India’s gems and jewellery trade.

Gems and jewellery are used in India in a range of trade-based money laundering (TBML) schemes.

Regulatory powers

The regulator can issues guidelines and prescribe measures to establish the identity of buyers and sellers in trade and retail transactions.

The GSTI can also demand information on traders’ business relationships as well as the nature and value of specific transactions.

Record keeping

Dealers in gems and jewellery will be required to maintain a record of all but the smallest transactions, asset purchases and cross-border wire transfers.

The regulator is also expected to introduce rules demanding traders undertake due diligence on their suppliers and customers and report suspicious transactions.

Entry powers

The GSTI has authority to license, authorise, register, regulate or supervise the activity of individuals and firms across the gems and jewellery trade.

The regulator may also enter into traders’ premises if money laundering or terrorist financing is suspected.

Categories: Trade Based Financial crimes News