Suspicion of Money Laundering and Terrorist Financing Rocks Financial Sector
Regulators are on high alert after receiving reports of suspicious transactions and activities that may be linked to money laundering and terrorist financing.
Enhanced Precautions for Financial Institutions
Several financial institutions have been asked to take extra precautions to prevent such illegal activities, including:
- Implementing strict customer due diligence measures
- Reporting any suspicious transactions to the authorities
These measures are part of a new law aimed at combating money laundering and terrorist financing. The law requires financial institutions to develop risk management procedures to identify politically exposed persons and take specific measures to combat these crimes.
Group-Wide Programs Against Money Laundering and Terrorism Financing
Financial institutions are also required to implement group-wide programs against money laundering and terrorism financing, including:
- Policies and procedures for exchanging information within the group
- Risk management procedures to identify politically exposed persons
Record Keeping and Confidentiality
Under the law, financial institutions must keep records of local and international transactions for at least five years, as well as all records obtained through customer due diligence procedures. These records must be kept confidential and can only be accessed by authorized personnel.
Additionally, the law prohibits reporting entities from disclosing any information about suspicious transactions or reports submitted to the authorities.
Regulatory Action
Regulatory and supervisory authorities have been tasked with following up on compliance with the new law, conducting:
- On-site and off-site inspections
- Information exchange with counterpart entities in areas related to anti-money laundering and counter-terrorism financing
The authorities have also issued instructions for implementing the anti-money laundering and counter-terrorism financing requirements set out in the law.
Entity Cooperation
Competent entities are required to notify the authorities immediately of any suspicion of money laundering or terrorist financing that they detect in the course of performing their competences. They must also take necessary procedures and means to exchange information and coordinate with the authorities regarding anti-money laundering and counter-terrorism financing.
Furthermore, the law prohibits entities convicted of a felony or misdemeanor related to the violation of the provisions of this law from holding controlling shares in any financial institution or being the beneficial owner of those shares.
By taking these measures, financial institutions can help prevent money laundering and terrorist financing activities and maintain public trust.