Financial Crime World

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FINANCIAL INSTITUTIONS AND DNFBPS TO BOOST AML/CTF EFFORTS

In a bid to combat money laundering (ML) and terrorist financing (TF), the government has issued new regulations requiring financial institutions and designated non-financial businesses and professions (DNFBPs) to implement enhanced anti-money laundering and combating the financing of terrorism (AML/CFT) measures.

Enhanced Customer Due Diligence

The new regulations require financial institutions and DNFBPs to conduct customer due diligence (CDD) on all customers, including individuals and legal entities, as well as beneficial owners. This includes:

  • Verifying the identity of customers
  • Understanding their business or introducing business
  • Reporting any suspicious transactions to the Financial Intelligence Unit

Reliance on Third Parties

According to Article 11 of the new regulations, financial institutions and DNFBPs may rely on third parties to perform CDD measures, but they will be ultimately responsible for ensuring compliance with the implementing regulation.

Identification and Verification of Beneficial Owners

The regulation also sets forth standards related to the identification and verification of beneficial owners.

Enhanced Due Diligence

The new regulations also require financial institutions and DNFBPs to apply enhanced due diligence (EDD) to business relationships and transactions performed with natural or legal persons from countries identified by the Committee as high-risk countries.

Keeping Records Up-to-Date

Financial institutions and DNFBPs are required to ensure that documents, data, and information related to CDD processes are kept up-to-date and relevant on an ongoing basis. They must also:

  • Perform EDD where ML/TF risks are higher
  • Apply simplified CDD measures where lower risks have been identified

Correspondent Relationships

The regulations prohibit financial institutions from entering into or continuing correspondent relationships with shell banks, and require them to take appropriate measures to mitigate risks resulting from such relationships.

Wire Transfers

Financial institutions are required to:

  • Obtain accurate information concerning the originator and beneficiary of wire transfers exceeding a certain value
  • Attach this information to transfer orders or relevant messages throughout the payment chain
  • Prohibit carrying out wire transfers with persons and entities listed in accordance with UN Security Council resolutions

Licensing and Supervision

Money or value transfer services providers must be licensed by the Bank, which will supervise them and apply punitive measures against unlicensed providers.

Record Keeping

Financial institutions and DNFBPs are required to maintain records of all domestic and international transactions and operations for a minimum period of 10 years, as well as documents and data obtained during due diligence processes.

Reporting Suspicious Transactions

The regulations require financial institutions and DNFBPs to promptly report any information concerning suspicious transactions or operations to the Unit, regardless of value. They must also make available information obtained during the due diligence process and transaction records upon request from competent authorities.

STRENGTHENING THE FIGHT AGAINST ML/TF

The new regulations aim to strengthen the fight against ML/TF by:

  • Increasing transparency
  • Improving customer due diligence
  • Enhancing risk management systems

These regulations demonstrate the government’s commitment to combating financial crime and protecting the integrity of the financial system.

CONTACT US

For more information on the new regulations, please contact our editorial team at [insert contact details].