Financial Crime World

Money Laundering and Financial Crime: Maldives Sets Up Anti-Money Laundering and Counter-Terrorist Financing Framework

The tropical island nation of Maldives has taken significant strides towards establishing a robust anti-money laundering and counter-terrorist financing (AML/CFT) framework. In this article, we provide a detailed analysis of the measures put in place by Maldives to combat money laundering and terrorist financing.

Pre-Visit Measures

During an onsite visit in October 2010, Maldives had already implemented several essential AML/CFT measures:

  1. Due diligence measures: Maldives had implemented customer identification, enhanced due diligence for politically exposed persons, and risk management procedures.
  2. Legal provisions: Maldives had enacted relevant legislation, imposing administrative sanctions and criminal liability upon violators.
  3. Suspicious Transaction Reporting: The Financial Institutions Act of 1985, as amended in 2009, mandated the reporting of suspected transactions.
  4. Record-keeping requirements: Financial institutions were required to maintain records of their transactions consistent with international best practices.
  5. Penal Code amendments: The Maldivian Penal Code had been amended to address money laundering and terrorist financing offenses.
  6. International cooperation: Maldives had signed various international agreements to enhance cooperation in combating money laundering and terrorist financing.

Post-Visit Improvements

Post the onsite visit, Maldives made further improvements to their AML/CFT framework:

  1. Establishment of a Financial Intelligence Unit (FIU): Maldives established an FIU to receive, process, analyze, and disseminate suspicious transaction reports to relevant authorities.
  2. Enhanced customer identification requirements: Financial institutions were mandated to implement Know Your Customer (KYC) procedures, including the identification of beneficial owners.
  3. Tighter regulation of non-bank financial institutions: New regulations were introduced to oversee and regulate non-bank financial institutions.
  4. Increased capacity building: Maldives has been developing its competencies in AML/CFT matters through various training programs and workshops.
  5. Reinforcement of judicial and law enforcement frameworks: The government has been strengthening its judicial and law enforcement institutions to improve the investigation and prosecution of money laundering and terrorist financing offenses.

Conclusion

As the Maldives continues to fortify its AML/CFT framework, the country is poised to mitigate the risks of money laundering and terrorist financing, thereby contributing to the global efforts against financial crime:

  • Due diligence measures

  • Customer identification

  • Enhanced due diligence for politically exposed persons

  • Risk management

  • Legal provisions

  • Relevant laws and regulations

  • Imposing administrative sanctions and criminal liability

  • Suspicious Transaction Reporting

  • Mandatory reporting of suspected transactions

  • Record-keeping requirements

  • Maintaining records of transactions

  • Penal Code amendments

  • Addressing money laundering and terrorist financing offenses

  • International cooperation

  • Enhancing cooperation in combating money laundering and terrorist financing

  • Establishment of FIU

  • Receiving, processing, analyzing, and disseminating suspicious transaction reports

  • Enhanced customer identification requirements

  • Implementing KYC procedures

  • Identifying beneficial owners

  • Tighter regulation of non-bank financial institutions

  • Overseeing and regulating non-bank financial institutions

  • Increased capacity building

  • Developing competencies in AML/CFT matters

  • Reinforcement of judicial and law enforcement frameworks

  • Strengthening judicial and law enforcement institutions

The Maldives’ commitment to combating money laundering and terrorist financing is a significant step towards ensuring financial integrity and stability.