Financial Crime World

Regulatory Body Warns: Fines and Imprisonment for Non-Compliance

The regulatory body has issued a stern warning regarding non-compliance with its directions under the Financial Intelligence and Anti-Money Laundering Act (FIAMLA) and the United Nations Sanctions Act. Failure to comply will result in severe consequences, including fines and imprisonment.

Fines and Imprisonment for Offences

  • Any individual found guilty of committing an offence under FIAMLA and UN Sanctions Act can be fined up to one million rupees and sentenced to imprisonment for a term not exceeding five years.
  • Individuals who destroy, falsify, conceal or dispose of information relevant to an onsite inspection or investigation will face a fine of up to five million rupees and imprisonment for a term not exceeding 10 years.

Directions by Regulatory Body

The regulatory body has been empowered to issue written directions to its members where it has reasonable cause to believe that a member is failing to comply with the requirements under FIAMLA and UN Sanctions Act. The body may take various actions, including:

  • Removing an employee from office
  • Asking a member to refrain from doing a specified act
  • Appointing a person to a specific office

Non-Compliance Consequences

  • Failure to comply with the regulatory body’s directions can result in daily fines of up to 5,000 rupees.
  • Any person who knowingly hinders or prevents compliance with a direction may be liable to a fine not exceeding one million rupees and imprisonment for a term not exceeding five years.

Administrative Sanctions

The regulatory body is empowered to impose administrative sanctions on members who contravene FIAMLA and/or UN Sanctions Act. These sanctions can include:

  • Fines
  • Penalties
  • Other measures deemed necessary by the body

Compounding of Offences

  • The regulatory body may compound an offence with the consent of the Director of Public Prosecutions (DPP).
  • If the DPP does not give his consent, the matter will be referred to the Police.
  • For individual lawyers and notaries, compounding of offences is not within the purview of the FIU, as all breaches or cases of non-compliance must be referred to the Attorney General.

Review Panel

The Review Panel has been established to review decisions made by the regulatory body regarding administrative sanctions. Members who are aggrieved by a decision can apply for a review within 21 days of the decision. The determination of the Review Panel is subject to judicial review by the Supreme Court.