Financial Crime World

Act to Combat Money Laundering and Terrorism Financing

Purpose and Objectives

This Act outlines the requirements and obligations for reporting entities, such as financial institutions, to prevent and detect money laundering and terrorist financing. The primary objective of this Act is to protect the integrity of the financial system, maintain public confidence in the financial system, and prevent and detect money laundering and terrorist financing.

Definitions

The following definitions are used throughout this Act:

  • Account: A demand deposit account or any other type of bank or other depository institution account.
  • Activity: Any transaction, operation, or series of transactions or operations involving financial assets or other instruments that could be used for money laundering or terrorist financing.
  • AML/CFT: Anti-Money Laundering and Combatting the Financing of Terrorism.
  • Beneficial Owner: The natural person(s) who ultimately owns or controls a customer, either directly or indirectly.
  • Business Relationship: A relationship between a reporting entity and its customers that is established for commercial purposes, including, but not limited to, providing financial services.
  • Cash: Any monetary instrument in physical form, such as cash notes and coins.

Reporting Entities

Reporting entities, such as financial institutions, are required to maintain Anti-Money Laundering and Combatting the Financing of Terrorism (AML/CFT) compliance programs to prevent and detect money laundering and terrorist financing. These entities must:

  • Identify and Verify Customers: Identify and verify the identity of customers and beneficial owners.
  • Maintain Records: Maintain records of transactions and customer information for a minimum period.
  • Report Suspicious Transactions: Report suspicious transactions to the Financial Intelligence Unit (FIU).

Financial Intelligence Unit (FIU)

The FIU is established as the national coordination body for AML/CFT, responsible for receiving, analyzing, and disseminating financial intelligence related to money laundering and terrorist financing.

Obligations of Reporting Entities

Reporting entities must:

  • Implement effective Anti-Money Laundering and Combatting the Financing of Terrorism (AML/CFT) compliance programs.
  • Conduct Customer Due Diligence (CDD).
  • Utilize Transaction Monitoring Systems.
  • Report Suspicious Transactions.
  • Maintain Record-Keeping Requirements.

Penalties for Non-compliance

The Act provides penalties for non-compliance, including fines and imprisonment. The FIU will play a crucial role in enforcing the Act and ensuring that reporting entities comply with their obligations.

Conclusion

This Act aims to prevent and detect money laundering and terrorist financing by requiring reporting entities to implement effective AML/CFT compliance programs. By doing so, it protects the integrity of the financial system, maintains public confidence in the financial system, and upholds the principles of Anti-Money Laundering and Combatting the Financing of Terrorism.