Financial Crime World

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Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) Directives

Section 11: Testing for Adequacy of Compliance

Financial institutions must conduct regular testing to ensure their AML/CFT compliance program is adequate, complete, and effective. This includes:

  • Conducting independent testing on a quarterly basis
  • Presenting reports on compliance status to the Board and the Center
  • Promptly addressing identified weaknesses or inadequacies

Section 12: Cooperation with Competent Authorities

Financial institutions must cooperate fully with all requests made under the proclamation and subsisting laws and directives, including providing relevant information to the Center and other authorities on AML/CFT matters. This includes:

  • Searching records and electronic databases within 24 hours of receiving a request
  • Reporting promptly to the Center the outcome of the search
  • Protecting the security and confidentiality of such requests

Section 13: Secrecy and Confidentiality Law

Secrecy and confidentiality laws of financial institutions should not inhibit the implementation of AML/CFT requirements under the proclamation and subsisting laws.

Section 14: Anonymous and Numbered Accounts

Financial institutions must not keep anonymous accounts, including numbered accounts. If nominee accounts are maintained, details of the beneficial owners must be provided on request.

Part III: Know Your Customer (KYC) and Identification Procedures

This section outlines the requirements for financial institutions to identify their customers, including natural persons and legal entities. This includes:

  • Taking a risk-based approach to KYC
  • Verifying customers’ identities using reliable, independently sourced documents or information
  • Establishing the identity of the ultimate beneficial owner and taking reasonable measures to verify their identity
  • Determining whether a customer is acting on behalf of another person and obtaining sufficient identification data

Conclusion

These directives aim to ensure that financial institutions implement effective AML/CFT measures to prevent money laundering and terrorist financing. By following these guidelines, financial institutions can help maintain the integrity of the financial system and prevent illicit activities.