Financial Crime World

Banking Institutions Must Take Action Against Money Laundering

In an effort to curb money laundering and terrorist financing activities, the Financial Intelligence Unit (FIU) has issued new guidelines requiring banking institutions to take strict measures to prevent such illegal activities in [country].

Designating a Money Laundering Reporting Officer

According to the guidelines, banking institutions must designate a Money Launderling Reporting Officer who will be responsible for:

  • Receiving and reporting suspicious transactions to the FIU
  • Requiring extensive training on money laundering and terrorist financing laws and regulations

Customer Due Diligence

The guidelines emphasize the importance of customer due diligence, requiring banks to:

  • Verify the identity of their customers
  • Maintain records of all transactions
  • Establish internal policies and procedures for detecting and reporting suspicious transactions

Prohibiting “Tipping Off”

In addition, the guidelines prohibit banks from disclosing information about a suspected transaction to the customer, known as “tipping off”.

Examples of Suspicious Transactions

The FIU has provided examples of suspicious transactions that may indicate money laundering or terrorist financing activities, including:

  • Unusually large cash deposits
  • Frequent exchange of cash into other currencies
  • Reluctance to provide normal information when opening an account

Feedback and Implementation

Banking institutions are encouraged to compile comments and feedback on the guidelines and forward them to the FIU for its consideration. The guidelines come into effect on April 1st, 2009.

Commissioner’s Statement

The Commissioner of the Financial Intelligence Unit, Rerman M. Kessy, emphasized the importance of compliance with the guidelines:

“It is essential that banks take these measures seriously and ensure that their employees are trained to recognize and report suspicious transactions,” said Commissioner Kessy. “We will work closely with banks to ensure that they comply with these guidelines and help prevent illegal activities.”

Broader Effort

The new guidelines are part of a broader effort by the government to combat money laundering and terrorist financing in [country].