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Know Your Customer (KYC) Procedures in Tanzania, United Republic of

Tanzania has a robust anti-money laundering (AML) framework in place, which requires financial institutions and professionals to implement Know Your Customer (KYC) procedures. This article provides an overview of the KYC requirements in Tanzania.

National Regulatory Framework

The Anti-Money Laundering Act, 2006 (AMLA) is the main legislation governing AML in Tanzania. The act came into effect in 2006 and is supported by other relevant laws and regulations. The Financial Intelligence Unit (FIU), an extra-ministerial department of the Ministry of Finance, plays a crucial role in controlling AML activities.

KYC Requirements

The FIU has issued guidelines for verifying customers’ identities, which require financial institutions to obtain certain documents from clients. For natural persons, these documents may include:

  • Birth certificates
  • Passports
  • Utility bills

For entities, such as corporations, the required documents may include:

  • Memorandum and Articles of Association
  • Certificate of incorporation
  • Annual reports

Customer Due Diligence

Financial institutions must conduct due diligence on their customers to ensure that they are not involved in any illegal activities. This includes verifying the customer’s:

  • Identity
  • Address
  • Occupation

For entities, this means verifying the identity of:

  • Directors
  • Shareholders
  • Agents

Reliance on Third Parties

Financial institutions can rely on third parties who are obliged by law to comply with AML regulations to conduct due diligence. However, they must verify the information provided and prepare a report in accordance with Section 17 of the AMLA.

Outsourcing Customer Due Diligence

While financial institutions can outsource customer due diligence to third-party providers that are not obliged by law to meet AML regulations, they remain accountable for verifying the accuracy of the information obtained.

Entities That Can Be Relied Upon

The following entities are specifically recognized as third parties that can be relied upon to comply with AML regulations:

  • Credit institutions
  • Financial institutions
  • Auditors, external accountants, and tax advisors
  • Notaries and other independent legal professionals
  • Trust or company service providers
  • Estate agents
  • Providers of gambling services

Conclusion

In conclusion, the KYC procedures in Tanzania require financial institutions to implement robust customer due diligence measures to prevent money laundering and terrorist financing. By understanding these requirements, financial institutions can ensure compliance with AML regulations and protect their reputation.