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Financial Regulators Crack Down on Money Laundering: New Reporting Requirements for Banks and Professionals
In a bid to combat money laundering and terrorist financing, the government has introduced new reporting requirements for banks, financial institutions, cash dealers, and professionals in relevant fields. Effective immediately, these entities will be required to report suspicious transactions within 15 working days of detection.
New Reporting Requirements
According to Section 14 of the Anti-Money Laundering Act, any transaction that a bank or financial institution has reason to believe may be a suspicious transaction must be reported to the Financial Intelligence Unit (FIU). The report must include details such as:
- Party or parties involved
- Amount and nature of the transaction
- Circumstances giving rise to suspicion
Record-Keeping Requirements
In addition to reporting requirements, banks and financial institutions will also be required to keep records of all transactions for a specified period, which may be extended by written notice from the FIU. The records must include information such as:
- Identification of parties involved
- Business relationships
- Any voluntary statements regarding the origin or destination of funds
Reporting Requirements
Under Section 15, reports must be lodged with the FIU in a prescribed form and must include all relevant details. No report will be required to be disclosed or admissible as evidence in court proceedings.
Confidentiality Protections
To ensure compliance with these new requirements, professionals involved in financial transactions are prohibited from informing anyone involved in the transaction or an unauthorized third party that a suspicious activity has been reported.
Legal Consequences of Reporting
Under Section 16, individuals who report suspicious transactions in good faith will be protected from legal consequences. No proceedings will lie against them for having reported suspicions, even if they prove to be unfounded.
Protection from Liability
In addition, banks and financial institutions will not incur liability for any breach of confidentiality when disclosing information in compliance with the Act.
Other Measures
The government has also introduced other measures to combat money laundering, including requirements for banks and financial institutions to:
- Verify the true identity of customers
- Maintain accurate records
- Failure to comply with these requirements may result in severe penalties.
Conclusion
The introduction of these new reporting requirements is a significant step forward in the fight against money laundering and terrorist financing. It is essential that all professionals involved in financial transactions understand their obligations under the Act to ensure compliance and prevent illegal activities.