Maldives Regulation on Anti-Money Laundering and Combating Financing of Terrorism

Implementation

The Maldivian government has implemented a regulation to prevent money laundering and financing of terrorism in banks within the country. The key points of this regulation are as follows:

• Banks must establish internal controls, risk management systems, and adequate screening procedures to prevent money laundering.
• They must also conduct regular internal audits to ensure compliance with this regulation.

Employee Training

All bank employees and agents acting on behalf of the bank must be trained on anti-money laundering (AML) and combating financing of terrorism (CFT) policies, customer due diligence measures, and suspicious transaction reporting. Employees and agents must also understand their roles and responsibilities in preventing money laundering.

Compliance Officer

Each bank must designate a compliance officer at the management level to implement this regulation within the bank. The bank must inform the name and contact details of the compliance officer to the Financial Intelligence Unit (FIU).

Administrative Penalties

The FIU may impose administrative penalties on banks, their directors, officers, or employees who fail to comply with any provisions of this regulation. These penalties include:

• Issuing a written notice to comply within a specified period
• Imposing fines between 10,000 Maldivian Rufiyaa and 500,000 Maldivian Rufiyaa
• Imposing daily fines until compliance is obtained

Transitional Provisions

Banks must perform customer due diligence measures for existing customers within three months after the regulation comes into effect. The FIU may publish any administrative actions taken for non-compliance.

Definitions

The regulation includes definitions for key terms, such as:

• Agent: Any natural or legal person that carries out functions on behalf of a bank with a formalized agreement.
• Bank: Has the meaning assigned to it in the Prevention of Money Laundering and Financing of Terrorism Act.
• Beneficiary Institution: The bank that receives funds on the account of the beneficiary, including wire transfer beneficiaries.
• Business Relationship: A business or professional relationship between a bank and a customer with an element of duration.
• Financial Intelligence Unit (FIU): Refers to the FIU established under Section 27 of the Act.
• Legal Arrangement: Express trusts and other similar legal arrangements