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Eritrea Proclamation on Anti-Money Laundering and Combating Terrorist Financing

The Government of Eritrea has issued a proclamation aimed at preventing and combating money laundering and terrorist financing. The proclamation sets out several measures that financial institutions must take to ensure compliance with anti-money laundering and combating terrorist financing laws.

Customer Identification and Due Diligence

Financial institutions are required to maintain accurate and up-to-date information on their customers, including identification documents such as passports, identity cards, driving licenses, or similar documents. They must also verify the accuracy of this information and keep records of customer identification for a period of 10 years.

Additionally, financial institutions must adopt effective risk-based procedures for identifying and handling wire transfers that are not accompanied by complete originator information.

Correspondent Banks

Financial institutions must ensure that correspondent banks with direct access to their accounts comply with anti-money laundering and combating terrorist financing laws. If a correspondent bank fails to comply, the financial institution shall terminate its business relationship with that bank and consider reporting suspicious transactions.

Wire Transfers

For wire transfers exceeding USD 10,000 or its equivalent in other convertible currencies, ordering banks must obtain and maintain the originator’s identification information, including:

  • Full name
  • Account number or unique reference number
  • Complete address
  • Date and place of birth

Banks shall also adopt effective risk-based procedures for identifying and handling wire transfers that are not accompanied by complete originator information.

Training Programs

Financial institutions are required to establish ongoing employee training programs that incorporate responsibilities under anti-money laundering and combating terrorist financing laws, as well as policies, procedures, controls, and practices for:

  • Obtaining identification evidence
  • Applying the “know-your-customer” standard
  • Account monitoring
  • Enhanced due diligence
  • Record keeping
  • Reporting of suspicious transactions

Records Keeping

Financial institutions must keep records on customer identification, including:

  • Copies or records of official identification documents
  • Account files
  • Business correspondence

They must also maintain all necessary records of transactions for a period of 10 years to enable compliance with information requests from competent authorities.

Establishment of Financial Intelligence Unit (FIU)

An autonomous FIU has been established to serve as a national authority responsible for receiving, requesting, analyzing, and disseminating information concerning money laundering and terrorist financing. The FIU shall:

  • Receive reports of suspicious transactions issued by financial institutions
  • Analyze and assess them
  • Send any relevant information to law enforcement authorities

Powers and Functions of FIU

The FIU shall have the power to:

  • Receive, analyze, and assess reports of suspicious transactions
  • Send reports to law enforcement authorities and supervisory bodies
  • Conduct inspections of financial institutions
  • Identify training requirements for financial institutions
  • Provide training on customer identification, transaction record keeping, and reporting obligations
  • Conduct investigations into money laundering or terrorist financing in financial institutions

The proclamation is aimed at preventing and combating money laundering and terrorist financing in Eritrea. Financial institutions must comply with the requirements set out in the proclamation to ensure that they are not involved in any illegal activities.