Financial Crime World

Tanzania: The Unseen World of Money Laundering

A Serious Concern

Money laundering is a significant issue in the United Republic of Tanzania, requiring attention and cooperation from all stakeholders. To address this concern, various regulations and laws have been implemented to prevent and combat money laundering.

Primary Legislation

The Anti-Money Laundering Act (AMLA) 2006 is the primary legislation governing anti-money laundering in Tanzania. This act provides a framework for preventing and combating money laundering and terrorist financing.

Role of the Financial Intelligence Unit (FIU)

The FIU, an extra-ministerial department of the Ministry of Finance, plays a crucial role in controlling money laundering in Tanzania. The FIU is responsible for:

  • Receiving suspicious transaction reports and other information regarding potential money laundering or terrorist financing
  • Analyzing and disseminating this information to relevant authorities

National Multi-Disciplinary Committee on Anti-Money Laundering

The National Multi-Disciplinary Committee on anti-money laundering assesses and improves anti-money laundering policies and advises the government on anti-money laundering and related matters.

Regulators Involved in Anti-Money Laundering Efforts

Other regulators involved in anti-money laundering efforts include:

  • Bank of Tanzania
  • Individual banks and financial institutions
  • Capital Markets and Securities Authority
  • Insurance Supervisory Department
  • Other relevant authorities

Know Your Customer (KYC) Guidelines

To comply with KYC guidelines, financial institutions are required to:

  • Verify the identity, suitability, and risks involved with maintaining a business relationship
  • Obtain official records reasonably capable of establishing the true identity of the client
  • Conduct due diligence measures such as reviewing documents, making phone calls, and sending emails

Guidelines for Verification of Customers’ Identities

The FIU has issued guidelines that provide further elaboration on due diligence measures. For natural persons, financial institutions are required to:

  • Verify information by obtaining full names with official documents
  • Confirm date of birth and nationality from an official document
  • Contact the client through various means

For entities, financial institutions must:

  • Review a copy of the latest periodical reports and accounts
  • Conduct an enquiry confirming submitted documents
  • Communicate with registered authorities on the authenticity of registration certificates
  • Undertake other due diligence measures

Relying on Third-Party Service Providers

In Tanzania, it is possible to meet customer due diligence requirements by relying on third parties who are obliged by law themselves to comply with AML regulations. However, when a third party conducts due diligence, the primary role of the party that requested the information is to:

  • Verify and later be accountable for the information

Entities That Can Be Relied Upon

Entities that could be relied on specifically by law as a third party to comply with AML regulations include:

  • Credit institutions
  • Financial institutions
  • Auditors
  • External accountants
  • Tax advisors