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Failure to Comply with Anti-Money Laundering Regulations Can Have Serious Consequences
The Seychelles Financial Intelligence Unit (FIU) emphasizes the importance of compliance with anti-money laundering (AML) regulations to combat money laundering and terrorist financing.
Consequences of Non-Compliance
Under the Prevention of Terrorism Act and AML/CFT legislation, reporting entities are required to make certain disclosures and adhere to specific obligations. Failure to comply can result in:
- Disciplinary action by the relevant supervisory authority
- Criminal prosecution for breach of AML or Prevention of Terrorism Acts or complicity in money laundering
Risk-Sensitive Approach to Due Diligence and Monitoring
The AML Regulations 2012 reflect a risk-sensitive approach to due diligence and monitoring. Reporting entities are permitted to adopt different approaches to customer due diligence (CDD) and ongoing monitoring depending on the level of risk associated with their customers.
- However, this does not detract from the ultimate responsibility of reporting entities to identify and address actual risks arising in the course of their business
Importance of Internal Controls and Compliance Officer
Reporting entities are required to take appropriate measures to ensure that all officers, employees, and agents understand and comply with applicable AML/CFT procedures.
- Individuals with no employees or associates do not need to appoint a separate compliance officer
- All other reporting entities must appoint a senior officer with overall responsibility for AML/CFT compliance (Compliance Reporting Officer - CRO)
Customer Due Diligence
CDD has four key components:
- Identifying customers
- Verifying identity
- Obtaining information about business relationships
- Taking reasonable measures to ascertain the purpose of transactions
The concept of beneficial ownership is critical in determining the true nature of customer relationships.
Ongoing Monitoring
Reporting entities must also engage in ongoing monitoring to identify suspicious transactions and trends associated with money laundering and financing of terrorism.
- Reviewing arrangements regularly to verify compliance with internal procedures
- Updating procedures as necessary
Conclusion
Compliance with AML/CFT regulations is crucial for reporting entities operating in Seychelles. Failure to comply can result in serious consequences, including criminal prosecution. Reporting entities must take appropriate measures to ensure that they are complying with all relevant obligations to protect their reputation and integrity.