Electronic Funds Transfer: A Growing Concern for Financial Institutions

As electronic funds transfer (EFT) becomes increasingly popular, financial institutions are facing a new set of challenges in preventing money laundering and financing of terrorism. The Financial Intelligence Unit (FIU), an independent national unit, is working to combat these threats by monitoring transactions and analyzing suspicious activity.

National Risk Assessment

To better understand the risks associated with EFT, the FIU has launched a national risk assessment program. This program involves conducting regular reviews of the financial system to identify vulnerabilities and develop strategies to mitigate them. The Supervisory Committee is responsible for leading this effort, which includes participation from all relevant national institutions.

Sectoral Assessments

In addition to the national risk assessment, sectoral assessments are also being conducted to identify specific risks within various industries. These assessments will help financial institutions better understand the unique challenges they face and develop targeted strategies to address them.

Shell Banks and Anonymous Accounts

The FIU is also working to prevent the use of shell banks and anonymous accounts, which can be used to facilitate illegal activities. Shell banks are prohibited in Angolan territory, and financial institutions are required to avoid establishing correspondent relationships with these types of entities.

Duties of Financial Institutions

Financial institutions have a critical role to play in preventing money laundering and financing of terrorism. They must:

• Conduct regular risk assessments
• Maintain accurate records
• Report suspicious activity to the FIU
• Develop internal policies and procedures to mitigate risks and ensure compliance with regulations

Tools for Effective Risk Management

To effectively manage risks, financial institutions must develop tools and information systems that can identify and assess potential threats. This includes:

• Documentation of inherent risks
• Continuous reassessment of risk
• Use of technical and technological mechanisms to provide information to competent authorities

Conclusion

As EFT continues to grow in popularity, it is essential that financial institutions prioritize risk management and work closely with the FIU to prevent money laundering and financing of terrorism. By doing so, they can help ensure the integrity of the financial system and protect the public from these threats.