Financial Crime World

Title: New Money Laundering and Proceeds of Crime Regulations in Lesotho

Introduction

  • Lesotho’s Parliament passed the Money Laundering and Proceeds of Crime Regulations, 2019
  • Replaces Money Laundering and Proceeds of Crime Regulations, 2015
  • Supplement to Money Laundering and Proceeds of Crime Act, 2008
  • Prevents and combats money laundering and terrorist financing

Overview of the New Regulations

  • Covers customer due diligence, record-keeping, reporting, and ongoing monitoring
  • Includes provisions related to virtual assets and digital wallets
  • Financial institutions and designated non-financial businesses and professions affected

Customer Due Diligence and Risk Assessment

  • Mandatory for financial institutions and designated non-financial businesses and professions
  • Customer identification, verification, and ongoing monitoring
  • Enhanced due diligence measures for high-risk transactions
    • Politically exposed persons
    • Transactions with higher risk of money laundering or terrorist financing
    • Transactions with high-risk countries

Record-Keeping and Reporting

  • Required to maintain records of customer identification procedures, transactions, and risk assessments
  • Suspicious transactions to be reported to the Financial Intelligence Unit (FIU) within 15 days

Virtual Assets and Service Providers

  • Virtual assets and service providers now subject to the same AML/CFT regulations

Implementation and Enforcement

  • Effective date: March 29, 2019
  • Financial institutions and designated non-financial businesses and professions to update policies and procedures
  • Lesotho’s Financial Intelligence Unit (FIU) responsible for supervision and enforcement
    • Examining records
    • Issuing warnings
    • Imposing administrative penalties
    • Referring cases to law enforcement authorities
    • Penalties for non-compliance: Fines or imprisonment

Conclusion

  • A step towards strengthening Lesotho’s financial system
  • Encourages financial institutions and designated non-financial businesses and professions to familiarize themselves with the requirements and update their policies and procedures accordingly