Black money being converted to gold? Government tightens surveillance

KOCHI: Central government has put a watch on gold transactions worth huge amounts. If a user, through single or multiple transactions, buys or transacts gold worth above Rs 10 lakh then the gold dealers should report the information. The Financial Intelligence Unit (FIU) under the Finance Ministry has issued a circular seeking details of large transactions from gold traders. In a circular sent by the FIU to trade associations and councils on July 3, it is said that they should inform about all suspicious transactions above Rs 10 lakh. This condition is also applicable to the transaction of precious gems. The central government's move is aimed at the increasing conversion of black money into gold and curbing terrorist funding.

In 2020, the Ministry of Finance had issued a notification bringing the gold management sector under the Prevention of Money Laundering Act (PMLA). Subsequently, the Enforcement Directorate (ED) had sent a circular to the gold traders asking them to report any sale transaction above Rs 10 lakh. After two and a half years, FIU has come to the scene.

Traders should take note

The details of consumers who claim to pay in foreign currency, ones with suspicious behavior and those who claim to pay through RTGS, UPI and NEFT from multiple accounts must be shared. Details of suspiciously large amounts of money coming into gold purchase scheme accounts from abroad, etc., and the information of those who belong to the criminal list, including UAPA, should be handed over.

Information must be provided within 7 days

In case of large transactions, gold dealers should keep a record of the information to be provided to ED and FIU. The information is directed to be forwarded to the concerned investigating agency within seven days.

Gold jewelery traders with a turnover of over Rs 500 crore in the last financial year (2022-23) should appoint a nodal officer for this. Those below Rs.500 crore should appoint a nodal officer through trade association or organization. Failure to comply with the new rule will result in a fine of up to one lakh rupees.

Association with protest

All Kerala Gold and Silver Merchants Association (AKGSMA) State Treasurer S Abdul Nasser has alleged that the Center is trying to bring a bad name to gold traders and consumers by putting them in doubt through such circulars. He said that in a circular dated December 2020, the Center had clarified that in addition to confiscation under the PMLA, if the suspicious transaction is caught, the employee and the owner of the shop will be jailed for a term of three to seven years. He said that targeting only those who sell gold as per the law is objectionable.