Banking Institutions Must Take Proactive Approach to Money Laundering Detection
In a bid to curb money laundering and terrorist financing, banking institutions are being urged to take a proactive approach in detecting suspicious transactions and reporting them to the relevant authorities.
Comprehensive Training for Employees
According to new guidelines issued by the Financial Intelligence Unit (FIU), all banking institutions must ensure that their employees, regardless of level or seniority, receive comprehensive training on money laundering detection and reporting within the first month of employment. This training should cover:
- Identifying factors that may give rise to suspicions
- Procedures to follow when a transaction is deemed suspicious
Frontline Staff: Key Detectives
Frontline staff are crucial in detecting potential money launderers. They must be trained to recognize red flags such as:
- Large cash transactions
- Money transfers
- Negotiable instruments
- Certificates of deposit
- Letters of credit
Extra Vigilance Required for Occasional Customers
When dealing with occasional customers, particularly those involved in large cash transactions, branch staff should exercise extra vigilance. They should be aware that criminal money can be paid in or drawn out across branch counters and take note of:
- Credit and debit transactions from other sources
- Credit transfers
- Wire transfers
- ATM transactions
Training for Account Opening Staff
Staff responsible for account opening and acceptance of new customers must receive basic training on money laundering detection and reporting procedures. Higher-level instruction should also be provided to supervisors and managers covering all aspects of money laundering procedures, including:
- Verification of identity
- Retention of records
- Disclosure of suspicious transaction reports
Refresher Training Mandatory
The FIU has emphasized the need for refresher training at least annually to ensure that staff remain up-to-date on new developments in anti-money laundering (AML) regulations and guidelines.
Protection of Reporting Persons and Staff
Banking institutions are urged to establish procedures to prevent the unauthorized disclosure of information related to suspicious transactions, thereby protecting reporting persons and staff from criminal and civil liability.
Review of Guidelines
Banking institutions are encouraged to compile and record any comments or feedback they may have regarding these guidelines and forward them to the FIU for review.
Effective Date
The guidelines take effect from 1st April, 2009.
In conclusion, banking institutions must take a proactive approach in detecting and reporting suspicious transactions to prevent money laundering and terrorist financing. The guidelines aim to ensure that all staff are equipped with the necessary knowledge and skills to identify and report potential money laundering activities.