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Know Your Customer Regulations in Tanzania, United Republic of

The Know Your Customer (KYC) guidelines and regulations for financial services in Tanzania, United Republic of require that professionals verify the identity, suitability, and risks involved with maintaining a business relationship.

Tanzania’s National Regulatory Framework on Anti-Money Laundering (AML)

The main act governing AML in Tanzania is the Anti-Money Laundering Act, 2006 (Act No. 12 of 2006), which came into operation in 2006. The act works together with several other laws to combat money laundering and terrorist financing.

National Regulator for AML Controls

The Financial Intelligence Unit (FIU) is an extra-ministerial department of the Ministry of Finance responsible for controlling AML in Tanzania. Section 4(2) of the AML Act empowers the FIU to receive, analyze, and disseminate suspicious transaction reports and other information regarding potential money laundering or terrorist financing.

Other Regulators Involved in AML Controls

  • Bank of Tanzania
  • Individual Banks & Financial Institutions licensed by the Bank of Tanzania
  • Capital Markets and Securities Authority
  • Insurance Supervisory Department
  • Gaming Board
  • Ministry of Finance (Orders of the Minister)
  • Ministry of Home Affairs
  • Attorney General of the United Republic of Tanzania
  • Director of Public Prosecution
  • Director of Prevention and Combating of Corruption Bureau
  • Police Force
  • Business Registration and Licensing Authority
  • Tanzania Revenue Authority
  • Customs & Excise Department
  • Municipal Trade/Licensing Officer
  • Registration Insolvency & Trusteeship Agency
  • Registrar of Societies & Non-Governmental Organizations
  • Immigration Department
  • Tanzania Investment Centre
  • Tanzania Intelligence & State Security Services Unit

Customer Due Diligence

Conducting a Typical KYC Identification Process

To verify a customer’s identity, an official record reasonably capable of establishing the true identity is required. This can include birth certificates, passports, or other official means of identification. For corporations, a copy of the organization’s Memorandum and Articles of Association, certificate of incorporation, and latest annual reports certified by the Registrar of Companies are also required.

Guidelines for Verification of Customers’ Identities

The FIU has issued guidelines that elaborate on due diligence measures. For natural persons, lawyers must verify client information by:

  • Confirming full names with official documents
  • Confirmed date of birth and nationality from an official document
  • Contacting the customer via telephone, mail, or email

For corporate entities, lawyers must verify information by:

  • Comparing registered name, registration number, and registered address with official documents
  • Verifying tax identification numbers
  • Collecting residential addresses and contact particulars of directors, shareholders who hold 5% or more of voting rights, and agents
  • Comparing trade names and business addresses with publicly available information

Relying on Third Parties for Customer Due Diligence

Entities can rely on third parties who are obliged by law to comply with AML regulations. However, the primary responsibility lies with the party that requested the information.

Outsourcing Customer Due Diligence

While outsourcing customer due diligence is permitted in Tanzania, there is no requirement for third-party providers to be licensed or registered.

Entities That Can Be Relied Upon as Third Parties

The following entities can be relied upon specifically by law as third parties to comply with AML regulations:

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

These entities can be relied upon to conduct due diligence on behalf of financial institutions. However, it is the primary responsibility of the financial institution to verify the information provided by these third parties.