Financial Crime World

Here is the rewritten article in Markdown format:

Banks and Financial Institutions Must Comply with Anti-Money Laundering and Combating the Financing of Terrorism Regulations

In a bid to prevent money laundering and terrorist financing, banks and financial institutions in the country are required to adhere to strict regulations. According to Article 24 of the Prakas on Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT), these institutions must maintain accurate records of all transactions and report any suspicious activities to the Financial Intelligence Unit (FIU).

Record Keeping and Reporting Requirements

The regulation requires banks and financial institutions to:

  • Keep a record of all customers, including their identification and transaction details
  • Monitor transactions and report any suspicious activity that may indicate money laundering or terrorist financing

Reporting Suspicious Activities

Article 25 outlines the procedures for reporting suspicious activities. Banks and financial institutions must submit a written report to the FIU within 24 hours of identifying a suspicious transaction, including:

  • Details about the transaction, including the amount, date, and parties involved

Confidentiality Obligations

According to Article 26, banks and financial institutions are prohibited from tipping off customers about reports made to the FIU. This means that they cannot notify customers that their transactions have been reported or disclose any information about the investigation.

Maintaining Suspicious Transaction Reports

Article 27 requires banks and financial institutions to:

  • Maintain a complete file on all suspicious transaction reports submitted by their employees
  • Take reasonable measures to ensure that all officers and employees involved in conducting or facilitating customer transactions are aware of reporting procedures

Detecting and Reporting Terrorist Financing Activities

Article 28 requires banks and financial institutions to detect and report terrorist financing activities, including:

  • Extending the suspicious transaction reporting system and mechanism to cover suspicions of terrorist financing
  • Maintaining a database of names and particulars of terrorists listed by the United Nations (UN)

Customer Due Diligence

The regulation also requires banks and financial institutions to:

  • Conduct checks on the names of new and existing customers against the names in the database
  • Take reasonable measures to verify and confirm the identity of their customer if a match is found

Establishing an Effective Internal Control System

Article 29 requires banks and financial institutions to establish an effective internal control system for AML/CFT compliance with legal and regulatory requirements, including:

  • Ensuring that all employees involved in conducting or facilitating customer transactions are aware of reporting procedures
  • Taking reasonable measures to prevent money laundering and terrorist financing activities

Conclusion

In conclusion, the Prakas on Anti-Money Laundering and Combating the Financing of Terrorism sets out strict regulations for banks and financial institutions to prevent money laundering and terrorist financing. These regulations require banks and financial institutions to maintain accurate records of transactions, report suspicious activity, and take measures to detect and prevent terrorist financing activities.