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Jamaica’s Fight Against Money Laundering and Terrorism Financing: What You Need to Know

As part of its efforts to combat money laundering and terrorism financing, the Bank of Jamaica has been publishing a series of questions and answers. In this latest installment, we explore the importance of Know Your Customer (KYC) regulations and their implications for financial institutions and individuals.

KYC Regulations: What You Need to Know

  • Will Financial Institutions Use This Information for Taxation Purposes? No, the information collected under KYC regulations will not be used for taxation purposes.
  • Can a Financial Institution Refuse to Do Business with Someone Who Refuses to Provide Required Information? Yes, if an individual refuses to provide required information, a financial institution can refuse to do business with them. This is to ensure that financial institutions comply with anti-money laundering and counter-terrorism financing (AML/CFT) regulations and protect themselves from being used for illegal activities.
  • Is It Discrimination If a Financial Institution Refuses to Do Business with Someone Who Refuses to Provide Required Information? No, it is not considered discrimination. The financial institution has the right to refuse business with someone who refuses to comply with KYC requirements.

Penalties for Non-Compliance

  • What Are the Consequences of Non-Compliance? Non-compliance with AML/CFT regulations can result in severe penalties, including fines and imprisonment. For individuals convicted of money laundering or terrorism financing, the penalties range from a fine not exceeding $1 million to imprisonment for up to 20 years. Corporations found guilty of non-compliance can face fines up to $3 million.
  • What Are the Consequences for Jamaica if Its Financial Institutions Are Deemed Non-Compliant? The Financial Action Task Force (FATF) has implemented a penalty feature, where countries deemed non-compliant with AML/CFT best practices are flagged as Non-cooperative Countries/Territories. This can lead to difficulty in maintaining correspondent accounts overseas and participation in the global financial system.

Conclusion

The Bank of Jamaica hopes that this series of questions and answers has provided clarity on the importance of KYC regulations and their implications for financial institutions and individuals. The guidance notes issued by the Bank may be viewed on its website at www.boj.org.jm.