Financial Crime World

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Combating Money Laundering and Terrorism Financing: Key Provisions

Money laundering and terrorism financing pose significant threats to global financial stability. To combat these risks, laws have been enacted to regulate financial institutions and reporting entities. This article summarizes key provisions related to combating money laundering and terrorism financing.

General Obligations

Reporting entities, including banks and financial institutions, play a crucial role in detecting and preventing suspicious transactions. The following are the general obligations of reporting entities:

  • Submit reports on suspicious transactions or business relationships.
  • Reports should include details such as transaction amounts, parties involved, and the reporting entity’s registration number.

Additional Scrutiny of Transactions

Reporting entities must conduct additional scrutiny on complex and unusually large transactions, as well as those with unusual patterns without apparent economic or legitimate purpose. This includes:

  • Maintaining data on these transactions for at least 5 years after termination of the business relationship or execution of the transaction.

To prevent money laundering and terrorism financing, procedures have been put in place during registration of legal persons and licensing of financial institutions. These include:

  • Founders (participants, members, shareholders, etc.) of a legal person must file a declaration on beneficial owners when registering the entity.
  • Reporting entities must submit information to the licensing body upon request.
  • The licensing body must notify the Authorized Body within 15 days after licensing or termination of license.

Authorized Body

The Authorized Body plays a vital role in combating money laundering and terrorism financing. Its functions and authorities include:

  • Receiving reports from reporting entities and information from state bodies and organizations.
  • Analyzing received reports and information.
  • Sending statements to criminal investigation authorities in cases stipulated by the law.
  • Requesting additional information from reporting entities or state bodies.
  • Imposing sanctions on financial institutions and legal persons.