Here is the converted article in Markdown format:
New Regulations Demand Enhanced Due Diligence in Business Transactions
Signatory Representation, Risk-Adequate Monitoring, and Enhanced Obligations Implemented to Combat Money Laundering and Terrorist Financing
In a move to strengthen measures against money laundering and terrorist financing, the government has introduced new regulations requiring enhanced due diligence in business transactions. The changes aim to prevent illegal activities by ensuring that businesses have a clear understanding of their clients’ backgrounds and intentions.
Signatory Representation
The new regulations stipulate that all signatories representing legal persons must be entered as attributes in qualified certificates issued under Article 5, Paragraph 1(d) of the Signature Act or in separate qualified attribute certificates issued under Article 5, Paragraph 2 of the same act. Furthermore, these certificates must not be older than 12 months.
Business Profile
Article 20 outlines the requirements for business profiles, which include:
- Information on contracting parties and beneficial owners
- Authorized agents
- Economic backgrounds
- Profession and business activities
- Intended use of assets
The degree of detail in this information will depend on the risk involved in the business relationship.
Risk-Adequate Monitoring
According to Article 21, risk-adequate monitoring of business relationships must be conducted using computerized systems whenever possible and cost-effective. If such systems are not available, another appropriate risk management system must be used.
Clarifications
Article 22 provides for simple clarifications to assess the plausibility of circumstances or transactions that deviate from the business profile. Special clarifications may also be required to dispel or corroborate suspicions arising from Article 17(1) of the Act.
Enhanced Due Diligence Obligations, Delegation of Due Diligence Obligations, and Global Monitoring
Article 23 outlines criteria for business relationships and transactions involving higher risks, including indicators for money laundering, predicate offences, organized crime, and terrorist financing. Additional measures may include:
- Verifying identities
- Clarifying the origin of assets
- Obtaining professional and business information
Risk Countries
Annex 2 lists countries whose anti-money laundering and anti-terrorist financing measures do not meet international standards or are insufficient. Transactions with contracting parties or beneficial owners from these countries will be subject to more intensive monitoring, regardless of transaction value.
Key Takeaways:
- Signatory representation must be entered as attributes in qualified certificates or separate attribute certificates.
- Business profiles must include specific information on contracting parties and beneficial owners.
- Risk-adequate monitoring must be conducted using computerized systems or alternative risk management systems.
- Enhanced due diligence obligations apply to business relationships and transactions involving higher risks.
- Transactions with contracting parties or beneficial owners from countries listed in Annex 2 will be subject to more intensive monitoring.
The new regulations aim to enhance the effectiveness of due diligence in business transactions, thereby reducing the risk of money laundering and terrorist financing. Businesses must comply with these regulations to avoid penalties and reputational damage.