Controlling Customer Relationships: A Key to Preventing Money Laundering and Terrorist Financing

New Regulations Emphasize Importance of Due Diligence in Financial Transactions

The Albanian government has introduced new regulations aimed at preventing money laundering and terrorist financing by requiring financial institutions to exercise greater control over customer relationships. These measures are designed to prevent criminal activities such as tax evasion, corruption, and illegal transactions.

Increased Due Diligence

Under the new regulations, financial institutions must conduct thorough due diligence on their customers, including:

• Verifying the identity of natural persons, legal entities, and proxy representatives
• Monitoring customer transactions
• Reporting suspicious activity to the authorities

Required Documents for Customer Identification

To identify and verify customer identities, financial institutions must retain specific data, including:

• First name
• Last name
• Date of birth
• Place of residence
• Employment information
• Identification document details

For legal entities, additional documentation is required, such as:

• Registration with the National Registration Centre
• Tax identification number
• Address of registered head office

Simplified Due Diligence for Low-Risk Customers

Financial institutions may apply simplified due diligence measures for customers deemed to be low-risk. This includes:

• Ongoing monitoring of transactions
• Reporting any unusual or suspicious activity

Suspension of Simplified Due Diligence Measures

If there is a suspicion of money laundering, terrorist financing, or criminal activity generating proceeds of crime, financial institutions must immediately suspend simplified due diligence measures and conduct comprehensive due diligence.

Consequences of Non-Compliance

Failure to comply with the new regulations can result in severe penalties, including:

• Fines
• License revocation

Financial institutions are advised to take these measures seriously and ensure that their customer relationship controls are robust and effective.

Conclusion

The new regulations emphasize the importance of due diligence in financial transactions and require financial institutions to exercise greater control over customer relationships. By implementing these measures, Albania aims to prevent money laundering and terrorist financing, while also ensuring a safer and more transparent financial system.