Lesotho Money Laundering Regulations: Senior Management to Ensure Compliance

In an effort to combat money laundering and terrorist financing, the Lesotho government has introduced regulations that require financial institutions and service providers to ensure senior management is involved in key decision-making processes.

Identification of Clients and Business Relationships

Regulation 7 of the Money Laundering and Proceeds of Crime Regulations, 2019 prohibits financial institutions and service providers from establishing business relationships with clients or customers where they fail to identify or verify their identity, ownership structure, or purpose of the relationship. Senior management must be involved in these decisions.

Cross-Border Correspondent Banking Relationships

Regulation 8 requires financial institutions and service providers to thoroughly vet cross-border correspondent banking relationships to ensure they do not facilitate money laundering or terrorist financing activities.

Reliance on Intermediaries or Third Parties

Regulation 9 allows financial institutions and service providers to rely on intermediaries or third parties to perform certain tasks, but they must bear ultimate responsibility for ensuring compliance with anti-money laundering regulations. Senior management must be involved in assessing the reliability of these intermediaries or third parties.

Enhanced Measures for Higher-Risk Countries

The regulations also provide for enhanced measures to be applied to clients or customers from higher-risk countries, as identified by the Financial Action Task Force (FATF) or deemed appropriate by sector supervisory authorities and the Unit.

Key Takeaways

• Senior management must be involved in key decision-making processes related to client identification, verification, and business relationships.
• Financial institutions and service providers must thoroughly vet cross-border correspondent banking relationships to prevent money laundering and terrorist financing activities.
• Reliance on intermediaries or third parties is allowed, but financial institutions and service providers must bear ultimate responsibility for ensuring compliance with anti-money laundering regulations.

Contact Information

For further information on the Money Laundering and Proceeds of Crime Regulations, 2019 in Lesotho, please contact:

• Sector Supervisory Authority
• Unit (name)

Note: The article is based on the provided regulations and is intended to provide an example of how the regulations could be rewritten in a more readable and accessible format.