Financial Obligations Regulations: New Requirements for Business Customers

The Financial Obligations Regulations, 2010 have introduced new requirements for business customers in Trinidad and Tobago. The regulations aim to prevent money laundering and terrorist financing by requiring financial institutions and listed businesses to conduct customer due diligence.

Identification Data Required

Financial institutions and listed businesses must collect identification data from all customers, including:

• Beneficial owners
• Directors
• Authorized representatives

This includes the following information:

• Name
• Date of birth
• Address
• Nationality
• A unique identifier such as a passport number or driver’s license number

Politically Exposed Persons

The regulations require financial institutions and listed businesses to identify politically exposed persons (PEPs) and take enhanced due diligence measures when establishing business relationships with them. PEPs include:

• Individuals who hold public office
• Close relatives of PEPs
• Individuals with significant influence over a country’s political process

Correspondent Banking

Correspondent banks must:

• Collect sufficient information about their respondent banks to understand the nature of their business and assess anti-money laundering controls
• Obtain approval from senior management before establishing new correspondent relationships
• Record the responsibilities of both parties

Shell Banks

Financial institutions and listed businesses are prohibited from entering or continuing a correspondent banking relationship with a bank that:

• Is incorporated in a jurisdiction without a physical presence
• Is unaffiliated with a financial group regulated by a supervisory authority

New Technology and Money Laundering Patterns

The regulations require financial institutions and listed businesses to pay special attention to money laundering patterns that may arise from new technology, such as:

• Anonymity-enhancing tools
• Take appropriate measures to address these concerns

Customer Due Diligence for Insurance Companies

Insurance companies must:

• Undertake customer identification procedures for parties entering into an insurance contract
• Establish the true nature of a principal if the party acts or appears to act on behalf of a principal, especially if the policyholder is accustomed to acting anonymously

Enforcement and Penalties

The regulations provide for penalties and enforcement measures to ensure compliance with the requirements. Financial institutions and listed businesses that fail to comply may face:

• Fines
• Imprisonment
• Both

In conclusion, the new regulations aim to strengthen the fight against money laundering and terrorist financing in Trinidad and Tobago by requiring financial institutions and listed businesses to conduct customer due diligence and take enhanced measures when dealing with politically exposed persons, shell banks, and other high-risk customers.