Know Your Customer Regulations Implemented in Lesotho to Combat Financial Crime

Introduction

The Money Laundering and Proceeds of Crime Act, 4 of 2008 (MLPCA) came into effect on April 10, 2008, introducing Customer Due Diligence (KYC) requirements to combat financial crime in Lesotho. This legislation aims to reveal the movement of funds derived from unlawful activities, thereby curbing money laundering and other criminal activities.

Compliance Requirements

Nedbank Lesotho Limited Reg No I92/191, an authorized financial institution and credit provider, is obligated to comply with these regulations. To achieve this, the bank requires customers to provide specific documentation to verify their identity and source of funds.

Individual Clients

Individual clients are required to submit the following documents:

• Valid National ID or Passport: A valid national ID or passport is required to verify individual clients’ identities.
• Address Verification Documents:
  • Valid letter from local chief
  • Utility bill
  • Lease, sublease, or rental agreement showing address
• Source of Funds Documentation:
  • Employment contract
  • Payslip
  • Letter from employer
  • Letter from local chief indicating source of funds

Business and Corporate Clients

Business and corporate clients are required to submit:

• Audited Financial Statements or Company Registration Documents: Accompanied by a valid tax clearance certificate.
• SMEs:
  • Traders’ licenses accompanied by a valid tax clearance certificate
  • Company registration documents with a valid tax clearance certificate
• Informal Bodies, Clubs, and Other Legal Entities:
  • Valid proof of registration
  • Letter from local chief proving existence

Additional Requirements

In addition to these requirements, customers are also required to provide identification and proof of residence for all signatories, controllers, and beneficial owners.

Resubmission of Documents

Nedbank advises that some KYC information and documentation may be illegible or incomplete, which is why customers may need to resubmit documents. The bank will contact customers if additional information is required on an ongoing basis.

Consequences of Non-Compliance

Failure to comply with these regulations can result in the freezing of accounts. Nedbank will make every effort to contact customers using their latest contact details. If customers fail to respond, their accounts will be frozen.

Conclusion

In summary, Nedbank Lesotho Limited Reg No I92/191 requires its customers to provide specific documentation to verify their identity and source of funds as part of the KYC regulations. Customers are advised to ensure that their latest contact details are up-to-date to avoid any disruptions to their services.