Financial Crime World

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

General Requirements

Banks and Development Finance Institutions (DFIs) must adhere to strict guidelines to prevent money laundering and terrorist financing. The following regulations outline the general requirements for customer due diligence and risk assessment:

  • Conduct Customer Due Diligence: Banks/DFIs must conduct comprehensive customer due diligence on all new customers, including verifying their identity and assessing the associated risks.
  • Enhanced Due Diligence: High-risk customers, such as those from countries identified by the Financial Action Task Force (FATF), require enhanced due diligence to ensure that their accounts are used for legitimate purposes.

Non-Governmental Organizations (NGOs)/Not-for-Profit Organizations (NPOs) and Charities

Banks/DFIs must take additional measures when establishing relationships with NGOs/NPOs and charities:

  • Enhanced CDD: Conduct enhanced customer due diligence to ensure that their accounts are used for legitimate purposes.
  • Account Opening: Open accounts in the name of the relevant NGO/NPO, and require comprehensive customer due diligence on individuals authorized to operate these accounts.

Asset Side Customers

Banks/DFIs must assess controls on asset products and related customers to implement effective due diligence requirements:

  • Comprehensive Assessment: Conduct a thorough assessment of controls on asset products and related customers.
  • Ongoing Monitoring: Monitor customers and related risks on an ongoing basis to mitigate the associated risks.

Correspondent Banking

Banks/DFIs must assess the suitability of respondent banks before establishing correspondent banking relationships:

  • Assess Suitability: Evaluate the reputation, quality of supervision, and AML/CFT responsibilities of respondent banks.
  • Senior Management Approval: Require senior management approval before establishing new correspondent banking relationships.

Risk Assessment

Banks/DFIs must conduct ongoing monitoring of customers and related risks to mitigate associated risks:

  • Ongoing Monitoring: Continuously monitor customers and related risks on an ongoing basis.
  • Risk Mitigation: Implement measures to mitigate the associated risks.