Central Bank Issues Guidance on Risk-Based Customer Due Diligence

The Central Bank has issued new guidelines for financial institutions to develop risk-based customer due diligence programs aimed at combating money laundering and terrorist financing.

Key Requirements

Conduct a gap analysis against the requirements of the Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) guideline by July 13, 2018.
Submit findings with an implementation plan to the Central Bank by July 13, 2018.
Conduct 2018 AML/ CFT external audits using the revised guidelines.

Designation of Anti- Money Laundering/Combating the Financing of Terrorism Supervisory Authority (SA)

The Central Bank has designated itself as the Anti-Money Laundering/Combating the Financing of Terrorism Supervisory Authority (SA) for financial institutions listed in the guideline. The SA’s responsibilities include:

Reviewing compliance programs
Approving compliance officers
Issuing guidelines
Receiving and reviewing AML/CFT external audit reports annually
Taking regulatory action against non-compliant entities

Revised Guideline

The revised guideline provides general guidance on AML/CFT governance and risk management, including key concepts such as:

Money laundering
Terrorism financing
The role of financial institutions in preventing these crimes

It also outlines the responsibilities of financial institutions, including:

Conducting customer due diligence
Monitoring transactions
Reporting suspicious activities

Implementation and Compliance

The Central Bank has emphasized that financial institutions must adapt their AML/CFT programs to fit their specific size, business models, and sectors. Failure to comply with the guideline can result in regulatory action, including suspension or revocation of a license.

Effective Date and Timeline

The revised guideline is effective immediately, and all regulated entities are expected to implement the new requirements by July 13, 2018.