Money Laundering and Terrorism Financing: New Rules for Reporting Entities in Maldives
In a bid to curb money laundering and financing of terrorism, the Maldivian government has introduced new regulations for reporting entities operating in the country.
Strict Customer Due Diligence Measures
Under the new rules, reporting entities such as financial institutions, lawyers, notaries, accountants, and trust and company service providers will be required to implement strict customer due diligence measures. These measures include:
- Verifying the identity of customers and beneficial owners
- Obtaining information on the source of wealth and funds
- Conducting ongoing monitoring of business relationships
Additional Measures for Politically Exposed Persons (PEPs)
The regulations also require reporting entities to determine if a customer or beneficial owner is a PEP and take additional measures to identify the source of wealth and funds. PEPs are individuals who hold or have held high-ranking public offices, such as heads of state or government officials.
Correspondent Banking Relationships
Reporting entities will be required to establish correspondent banking relationships with foreign financial institutions only after verifying their reputation and subjecting them to enhanced due diligence measures.
Special Identification Requirements for Certain Industries
The regulations also cover special identification requirements for certain industries, including:
- Insurance companies
- Real estate dealers
- Precious metals and stones dealers
- Independent legal professionals
These entities will be required to identify the parties involved in transactions and maintain records of these transactions.
Penalties for Non-Compliance
Reporting entities that fail to comply with the new regulations may face penalties, including:
- Fines
- Imprisonment
Enforcement Agency
The Maldives Monetary Authority has been tasked with enforcing the regulations and reporting non-compliance to the Financial Intelligence Unit.
Conclusion
The introduction of these regulations is a significant step towards combating money laundering and financing of terrorism in Maldives. By implementing strict customer due diligence measures, reporting entities can help prevent the misuse of financial systems for illicit activities.
Key Requirements
- Verify the identity of customers and beneficial owners
- Obtain information on the source of wealth and funds
- Conduct ongoing monitoring of business relationships
- Establish correspondent banking relationships with foreign financial institutions only after verifying their reputation
- Certain industries must identify the parties involved in transactions and maintain records of these transactions.