FINANCIAL INSTITUTIONS URGED TO STEP UP CUSTOMER IDENTIFICATION PROCESS
New Guidelines Issued to Prevent Money Laundering and Terrorist Financing
The Financial Transactions Reporting Act (FTR) has released new guidelines requiring financial institutions in Fiji to enhance their customer identification process to prevent money laundering and terrorist financing. These guidelines aim to strengthen Fiji’s anti-money laundering and counter-terrorism financing regime, ensuring that financial institutions play a critical role in preventing these illicit activities.
Simplified Identification Process
According to the guidelines, financial institutions must identify and verify certain customer details when undertaking a simplified identification process. The required details include:
- Customer’s name
- Permanent residential address in Fiji
- Occupation
Financial institutions may use identification documents listed in FTR Regulation 8(1) or (2) to verify the customer’s identity, which includes:
- Passports
- National IDs
- Birth certificates
Enhanced Identification Measures for High-Risk Customers
Customers who are assessed as high risk of engaging in money laundering and terrorist financing activities must undergo enhanced and complete identification measures. This includes:
- Non-resident customers
- Non-face-to-face customers
- Individuals previously reported in FIU Alert Notices
Financial institutions have also been advised to treat “politically exposed persons” (PEPs) as high-risk customers and subject them to enhanced identification checks. PEPs include:
- Government officials
- Senior politicians
- Executives of state-owned corporations
Family Members and Close Associates of PEPs
Family members and close associates of PEPs must also be treated as high-risk customers and undergo enhanced identification checks.
Identification Procedures for Non-Face-to-Face Customers
Financial institutions have been advised to conduct additional identification procedures when establishing business relationships with non-face-to-face customers, which may include:
- Certification of identification documents
- Requesting additional documents
- Independent contact with the customer
Conclusion
The new guidelines emphasize the importance of financial institutions taking reasonable measures to determine whether a customer is a PEP or associated with one. By implementing these enhanced customer identification processes, financial institutions can play a critical role in preventing money laundering and terrorist financing activities in Fiji.