Financial Crime World

LAOS MOVES TO FIGHT MONEY LAUNDERING AND TERRORISM FINANCING WITH NEW REGULATIONS

Lao People’s Democratic Republic Introduces New Regulations to Combat Financial Crimes

The Lao People’s Democratic Republic has recently introduced new regulations aimed at preventing money laundering and terrorism financing in the country. The regulations, which came into effect on [date], require financial institutions to take specific measures to identify and report suspicious transactions.

Key Requirements for Financial Institutions

  • Obtain permission before initiating or continuing transactions with customers involved in illegal activities.
  • Continuously monitor business relations and transactions with these customers.
  • Review the legal status of corresponding banks, gather information on their operations, assess creditworthiness, management, and audit practices, and ensure compliance with anti-money laundering and counter-terrorism financing (AML/CFT) regulations.

Wire Transfer Requirements

  • Collect and verify information on wire transfers, including:
    • Name and surname of the transferor.
    • Address.
    • Account number.
    • Purpose of the transfer.
  • Refuse payment if a transfer is missing or incomplete information and report it to the AML/CFT office.

Record-Keeping and Reporting Requirements

  • Maintain records on customers, business relations, and transactions for at least five years.
  • Report suspicious transactions to the AML/CFT office within three working days.
  • Report cash transactions or wire transfers exceeding a certain threshold to the AML/CFT office.

Confidentiality of Transactions

  • Maintain confidentiality of transactions reported in suspicion of money laundering or terrorism financing.

Roles and Responsibilities

  • The Bank of the Lao PDR is responsible for setting thresholds for cash transactions and wire transfers that require reporting, as well as issuing legislation on reporting.
  • The regulations aim to prevent the misuse of financial systems for illegal activities and ensure the integrity of the country’s financial sector.