Preventing Money Laundering in Banks and Financial Institutions

Introduction

The Financial Intelligence Unit (FIU) has established these guidelines to prevent money laundering and terrorist financing. Banks and financial institutions are required to implement these guidelines to ensure compliance with anti-money laundering regulations.

Definitions and Responsibilities

Definition of Money Laundering

• Money laundering is defined as the concealment or disguise of illicit funds obtained through a variety of means, including terrorism, corruption, and other serious crimes.

Roles and Responsibilities

• The FIU is responsible for receiving, analyzing, and disseminating financial intelligence related to money laundering and terrorist financing.
• Banks and financial institutions are required to report suspicious transactions to the FIU.

Suspicious Transaction Reporting

Banks and financial institutions must establish a process for reporting suspicious transactions to the FIU. Some examples of suspicious transactions include:

• Large cash deposits or withdrawals
• Transactions that do not appear consistent with the customer’s business or activities
• Unusual patterns of behavior, such as frequent changes in account information or transaction details
• Reluctance to provide normal information when opening an account

Money Laundering Reporting Officer (MLRO)

The MLRO is responsible for ensuring that the bank or financial institution complies with anti-money laundering regulations. The MLRO must be trained on all aspects of money laundering and terrorist financing.

Protection of Reporting Persons and Staff

Banks and financial institutions are protected from civil liability if they report suspicious transactions in good faith to the FIU, even if the transaction is not ultimately found to be related to money laundering or terrorist financing.

Tipping Off

Banks and financial institutions are prohibited from disclosing to customers that a suspicious transaction report has been filed with the FIU.

Review of Guidelines

Banks and financial institutions are encouraged to review these guidelines regularly and provide feedback to the FIU.

Effective Date

These guidelines become effective on April 1, 2009.

Appendix: Examples of Suspicious Transactions

• Large cash deposits or withdrawals
• Transactions that do not appear consistent with the customer’s business or activities
• Unusual patterns of behavior, such as frequent changes in account information or transaction details
• Reluctance to provide normal information when opening an account

Overall, these guidelines aim to help banks and financial institutions prevent money laundering and terrorist financing by providing a framework for identifying and reporting suspicious transactions.