Financial Intelligence Centre Issues New Directive on Freezing and Prohibition Measures

Combating Money Laundering, Terrorist Financing, and Proliferation Financing

The Financial Intelligence Centre (FIC) has issued a new directive aimed at combating money laundering (ML), terrorist financing (TF), and proliferation financing (PF). The directive outlines the freezing and prohibition measures that financial institutions must take when dealing with suspicious transactions or individuals.

Key Requirements

• Financial institutions are required to cease reporting sanctions screening matches, TF or PF suspicions via Suspicious Transaction Reports (STRs) or Suspicious Activities Reports (SARs).
• Instead, they must report such activities through new report types:
  • SNMA - Sanction Name Match Activity Report
  • TPFA - Terrorist & Proliferation Financing Activity Report
  • TPFT - Terrorist & Proliferation Financing Transaction Report

Asset Freezing and Prohibition Measures

• The directive states that asset freezing and prohibition measures have no time limit, and the funds or assets in question must remain frozen until the individual, entity, or group is removed from the relevant UN Sanctions List or a competent authority makes a decision to cancel the freezing measure.

Record-Keeping Requirements

• Financial institutions are required to keep records of all transactions and business relationships for at least five years.
• If requested by the FIC or other law enforcement bodies, they must keep these records for longer periods.

Reporting Institutions (RIs)

• RIs are exempt from certain provisions of the Financial Intelligence Act but still have sanctions screening obligations and are required to:
  • Develop and implement customer acceptance policies
  • Implement internal controls to effectively manage and mitigate risks of ML, TF, and PF activities

Summary of Directive

The FIC has stressed that this directive is intended to provide a summary of the legislation and is not comprehensive. The full text of the directive can be accessed on the FIC’s website at www.fic.na.

Freezing and Prohibition Measures Taken by Financial Institutions

• Freezing of assets: all financial institutions are required to freeze assets belonging to individuals, entities, or groups listed on the UN Sanctions List.
• Prohibition measures: financial institutions must prohibit making funds or other assets available to individuals, entities, or groups listed on the UN Sanctions List.
• Reporting requirements: financial institutions must report suspicious transactions or activities through new report types, including SNMA, TPFA, and TPFT reports.

Attachments

• Proof of freezing and prohibition measures taken by the financial institution (complete identification and address records of listed clients/associates; description of frozen assets; client’s address).