Financial Institutions Hit with Targeted Sanctions Amid Money Laundering Concerns
In a bid to combat money laundering (ML) and terrorist financing (TF), the government has imposed targeted financial sanctions on institutions failing to comply with customer due diligence (CDD) measures.
New Law Aims to Prevent Illicit Activities
According to Article 9 of the new law, financial institutions and designated non-financial businesses and professions (DNFBPs) are prohibited from opening or maintaining anonymous accounts or those in obviously fictitious names. This move aims to prevent the misuse of financial systems for illicit activities.
Stricter CDD Measures Introduced
The government has also introduced stricter CDD measures, as outlined in Article 10. Financial institutions and DNFBPs must now undertake customer due diligence when:
- Establishing business relationships
- Carrying out transactions exceeding a certain value
- Suspicions of ML/TF activity arise
This includes verifying the identity of customers, beneficial owners, and their relationships.
Enhanced Record-Keeping Requirements
Financial institutions are required to maintain detailed records of all domestic and international transactions for at least 10 years. This information must be made available to authorities upon request, without delay.
Crackdown on Shell Banks
The government has also taken aim at shell banks, prohibiting financial institutions from entering into or continuing correspondent relationships with such entities. Shell banks are often used as fronts for illicit activities, and this move aims to prevent their misuse.
Stricter Regulations on Money Transfer Services Providers
In addition, the government has imposed stricter regulations on money or value transfer services providers. These providers must now be licensed by the Bank and subject to supervision, with punitive measures in place for non-compliance.
Government’s Decision Marks Important Step Forward
The government’s decision comes amid growing concerns over ML/TF activity. The new law is designed to strengthen the country’s Anti-Money Laundering (AML)/Combating the Financing of Terrorism (CFT) regime and prevent the misuse of its financial system for illicit activities.
“We are taking a firm stance against money laundering and terrorist financing,” said a government official. “These measures will help us protect our financial system and prevent it from being used for illegal activities.”
The new law has been welcomed by anti-money laundering experts, who say it marks an important step in the fight against ML/TF.
“This is a significant development,” said an expert. “It shows that the government is serious about tackling money laundering and terrorist financing. We hope to see further measures introduced in the future to strengthen the country’s AML/CFT regime.”