Financial Crime World

Central Bank Cracks Down on Financial Institutions Failing to Meet AML/CFT Requirements

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The Central Bank has announced its intention to increase efforts to ensure that financial institutions operating in the country comply with Anti-Money Laundering (AML) and Combatting of Terrorism Financing (CFT) regulations.

Enhanced Monitoring and Review Process

As part of this effort, the Central Bank will be receiving and reviewing the annual AML/CFT external audit reports of all financial institutions under its supervision. These reports will be thoroughly reviewed to ensure that these institutions are adequately implementing necessary measures to prevent money laundering and terrorist financing.

The Central Bank has warned that it will take proportionate and dissuasive regulatory action against financial institutions and individuals who fail to comply with AML/CFT statutory obligations and guidelines issued by the bank. This includes:

  • Suspending or revoking licenses of non-compliant institutions
  • Imposing fines and penalties on individuals found to be in breach of these regulations

Information Sharing and Collaboration

The Central Bank has committed to sharing information with the Financial Intelligence Unit (FIU), Securities Commission (SEC) and other regulatory agencies as required for AML/CFT purposes. This includes disclosing information to the FIU in a timely manner where it has knowledge or reasonable grounds for believing that a financial institution may have been engaged in money laundering or terrorist financing.

The Central Bank is empowered by Regulations 40A and 40 of the Financial Institutions Act (FIA) and Section 10 of the Prevention of Money Laundering and Financing of Terrorism Act (POCA) to issue guidelines aimed at aiding compliance with AML/CFT regulations. Pursuant to Sections 12 and 86 of the FIA, the Central Bank can issue compliance directions to ensure that financial institutions comply with this guideline.

Terms and Conditions for Operations

The Terms and Conditions for the Operations of a Bureau de Change were also amended to require bureaux de change operators to meet AML/CFT requirements. Failure to comply with these terms can result in the suspension or revocation of a bureau’s license.

General Guidance on AML/CFT Governance and Risk Management

This guideline provides general guidance on AML/CFT governance and risk management for financial institutions supervised by the Central Bank. All financial institutions must ensure that they have adequate policies and procedures in place to detect and prevent money laundering and terrorist financing.

Key concepts defined in this guideline include:

  • Money laundering
  • Terrorism financing
  • The three stages of the money laundering process

The guideline highlights the importance of establishing appropriate policies and procedures to detect and prevent money laundering and terrorist financing.

Conclusion

By intensifying its efforts to ensure compliance with AML/CFT regulations, the Central Bank is sending a strong message that it will not tolerate non-compliance by financial institutions operating in the country.