Lax Enforcement of Customer Due Diligence Measures in Laos Leaves Room for Abuse
Background
Vientiane, Laos - Despite the introduction of customer due diligence measures aimed at combating money laundering and terrorist financing, authorities in Laos have been criticized for their lackluster enforcement.
The Requirements
Under Article 23 of the law, financial institutions are required to collect detailed data on customers, including:
- Names
- Dates of birth
- Nationalities
- Addresses
- Occupations
However, sources within the industry say that many institutions are not taking these requirements seriously, leading to a lack of effective monitoring and reporting.
Lack of Enforcement
“This is a major concern,” said a senior official at the Bank of the Lao PDR. “We need to ensure that financial institutions are complying with these regulations to prevent money laundering and terrorist financing.”
Article 24 requires financial institutions to collect data on customers’ transactions, including their goals and objectives for using the services provided by the institution. However, many institutions have been found to be lacking in this regard.
“It’s like they’re just going through the motions,” said a financial analyst. “They’re not really interested in knowing who their customers are or what they’re doing.”
Concerns about Politically Exposed Persons (PEPs)
Article 25 requires financial institutions to have an appropriate risk management system in place to identify whether customers or beneficiaries are PEPs.
However, sources say that many institutions are not taking the necessary steps to comply with this requirement.
“It’s a big loophole,” said a lawyer specializing in anti-money laundering regulations. “If institutions don’t have proper systems in place, it’s easy for money launderers and terrorist financiers to take advantage of the situation.”
Conclusion
The lack of enforcement is a major concern for authorities and experts, and that more needs to be done to ensure that financial institutions are complying with regulations aimed at combating money laundering and terrorist financing.