Financial Institutions Must Identify High-Risk Customers, Implement Strict Monitoring

Riyadh, Saudi Arabia - The Saudi Arabian Monetary Authority (SAMA) has issued new guidelines for financial institutions to identify and monitor high-risk customers, in an effort to combat money laundering and terrorist financing.

Identifying and Monitoring High-Risk Customers

According to the guidelines, financial institutions must establish procedures to determine whether a customer is a risk holder, and obtain senior management approval before establishing a relationship with such individuals. The institutions are also required to take measures to verify the sources of wealth of high-risk customers.

• Verify the sources of wealth of high-risk customers
• Establish procedures to identify and monitor high-risk customers
• Obtain senior management approval before establishing a relationship with high-risk customers

Continuous Monitoring of Transactions

Financial institutions must conduct accurate and continuous monitoring of transactions involving high-risk customers. This includes reviewing account activity, transaction patterns, and other relevant data to identify suspicious activity.

• Review account activity and transaction patterns
• Identify suspicious activity and report it to the relevant authorities
• Conduct continuous monitoring of transactions involving high-risk customers

Reporting Officer Training and Independence

The guidelines emphasize the importance of reporting officer training and independence. Reporting officers are responsible for identifying and reporting suspected money laundering or terrorist financing activities to the relevant authorities.

• Appoint a reporting officer with a high functional level, experience, competence, and appropriate educational qualifications
• Ensure the reporting officer is available 24/7 and has access to records and data required to carry out their duties

Internal Regulations and Record Keeping

Financial institutions must establish internal regulations that include policies, procedures, and internal controls to combat money laundering and terrorist financing. These regulations must include a clear anti-money laundering and terrorist financing policy approved by the Board of Directors.

• Establish internal regulations to combat money laundering and terrorist financing
• Maintain accurate and detailed records of customer transactions for at least five years from the date of completion of the transaction
• Make these records available to regulatory authorities upon request

Compliance and Penalties

Violations of the guidelines can result in penalties and fines imposed by SAMA. The authority has also emphasized the importance of employee training and awareness programs to ensure that all employees understand their roles and responsibilities in combating money laundering and terrorist financing.

• Implement measures to prevent money laundering and terrorist financing
• Conduct regular employee training and awareness programs
• Violations can result in penalties and fines imposed by SAMA

Quote from Dr. Salah Noori Khalaf, Chairman of SAMA

“The implementation of these guidelines is essential to protect the integrity of our financial system and prevent the misuse of our financial institutions for illegal activities.”