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TANZANIA: Know Your Customer Procedures Crucial in Anti-Money Laundering Fight

In a bid to combat money laundering and terrorism financing, the Financial Intelligence Unit (FIU) of Tanzania has issued guidelines for Bank of Tanzania (BoT) on know your customer (KYC) procedures.

Compliance with Anti-Money Laundering Laws and Regulations

According to the guidelines, BoT is required to comply with the Anti-Money Laundering Act Cap. 423, Anti-Money Laundering Regulations, 2007, and various guidelines issued by the FIU when dealing with customers. The regulator is also responsible for ensuring that all banking institutions under its jurisdiction have adequate anti-money laundering (AML) and combating the financing of terrorism (CFT) policies, procedures, and controls in place.

On-Site Inspections

The guidelines emphasize the importance of on-site inspections to ensure compliance with AML/CFT laws and regulations. BoT is required to develop an inspection manual and procedures for examining AML/CFT at banking institutions. The regulator must also report any violations of the Anti-Money Laundering Act, Cap. 423, Anti-Money Laundering Regulations, 2007, and various guidelines issued by the FIU.

Staff Training and Awareness

Staff training and awareness is another critical aspect of the guidelines. BoT is required to develop and implement a training program for its staff on AML/CFT issues, while banking institutions must also train their staff adequately in these areas.

Know Your Customer (KYC), Customer Due Diligence (CDD), and Enhanced Due Diligence (EDD)

The guidelines also highlight the importance of KYC, CDD, and EDD for more risky customers and transactions. BoT is required to ensure that banking institutions retain records pertaining to customer identification and transactions as required by law and regulations.

Reporting Suspicious Transactions

In addition, the guidelines emphasize the importance of reporting suspicious transactions to the FIU. BoT is required to file suspicious transaction reports with the FIU in case of any money laundering or financing of terrorism suspicion when dealing with its customers. Banking institutions must also report suspicious transactions to the FIU.

Effective Date

The guidelines have come into effect from April 1, 2009, and are expected to enhance Tanzania’s efforts to combat money laundering and terrorism financing.