Financial Crime World

Guinea Takes Step Against Financial Crime with “Know Your Customer” Guidelines

In an effort to combat the multi-trillion-dollar financial crime industry, Guinea has implemented stricter “Know Your Customer” (KYC) guidelines for firms operating in the country. The KYC framework is designed to help financial institutions and businesses verify the identity, suitability, and risks of current or potential customers.

History of the Guidelines

The KYC guidelines originated from years of unchecked financial crimes. The initial draft dates back to 1970 when the US passed the Bank Secrecy Act (BSA) to prevent money laundering. Notable additions were made after the Sept. 11, 2001 terrorist attacks and the 2008 global financial crisis.

Key Requirements

Under the regulations, firms are required to:

  • Monitor client behavior regularly
  • Develop a KYC strategy for engaging with customers
  • Comply with guidelines for any company with exposure to client risk

The “Know Your Customer” Framework

The framework consists of three steps:

Step 1: Customer Identification Program (CIP)

Collecting Identifying Information

Firms must collect four pieces of identifying information about a client, including:

  • Name
  • Date of birth
  • Address
  • Identification number

Many firms also conduct additional screening processes to ensure clients do not appear on government sanction lists, politically exposed person (PEP) lists, or known terrorism lists.

Step 2: Customer Due Diligence (CDD)

Examining Client Information

Firms examine the nature and beneficiaries of existing relationships to ensure all activity is consistent with historical customer information. The goal is to obtain enough information to verify a customer’s identity and assess their riskiness.

Step 3: Enhanced Due Diligence (EDD)

Verifying Additional Information

If a customer is believed to pose additional risks, firms take extra steps to gain a better understanding of their motivations. This includes:

  • Verifying the source of wealth
  • Obtaining detailed management reports
  • Conducting relevant third-party research

Goals and Benefits

The implementation of KYC guidelines in Guinea aims to identify suspicious behavior such as money laundering and financial terrorism before it materializes. By following these guidelines, firms can help prevent financial crime and maintain a safe and secure business environment.

By implementing stricter KYC guidelines, Guinea is taking a crucial step towards combating the multi-trillion-dollar financial crime industry.