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

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Article 10: Politically Exposed Persons (PEPs)

Financial institutions must adhere to specific guidelines when dealing with PEPs, which include individuals who hold or have held significant public office. The main points to consider are:

• Identification: Financial institutions must identify PEPs based on their business nature, relevant associations’ suspicious indicators, and in-house risk assessments.
• Risk Assessment: Current PEPs of foreign governments are treated as high-risk customers with enhanced due diligence measures.
• Domestic or International Organizations: For current PEPs of domestic or international organizations, financial institutions assess risks and apply enhanced CDD measures for higher-risk relationships.
• Senior Managerial Officers: Senior managerial officers of PEPs may also be subject to enhanced CDD measures based on their influence.

Article 11: Exceptions

Some entities within the financial sector are exempt from certain AML/CFT regulations. These include:

• Insurance Agents and Brokers: Insurance agents and brokers that only solicit or negotiate policies may be exempt from some AML/CFT regulations if they do not undertake underwriting or claim settlement business.

Article 12: Record Keeping

Financial institutions must maintain accurate records of business relations, transactions, and CDD measures for a specified period. The main points to note are:

• Record Retention: Financial institutions must maintain records in hard copy or electronic form for at least five years.
• Required Information: Records include:
  • CDD measures
  • Domestic and international transaction records
  • Customer information (e.g., passports, identity cards)