Simplifying Anti-Money Laundering Measures for Low-Risk Customers

The Tanzanian government has introduced new regulations to simplify anti-money laundering measures for customers deemed low-risk. The changes aim to reduce the burden on financial institutions while maintaining robust safeguards against money laundering, terrorist financing, and proliferation financing.

Simplified Customer Due Diligence (CDD) Measures

Under the revised rules, simplified CDD measures can be applied to customers identified as low-risk through risk assessments at the national, sectoral, institutional, or individual level. This decision is based on relevant information provided by regulatory bodies, financial intelligence units, and other competent authorities.

Proportionate CDD Measures for Moderate-Risk Customers

For customers associated with moderate money laundering, terrorist financing, and proliferation financing risks, CDD measures will be proportionate to the associated risks achieved through a combination of customer identification and verification approaches. These measures include verifying customer information through detailed or enhanced verification procedures.

Enhanced CDD Measures for High-Risk Customers

Enhanced CDD measures will be applied to customers deemed high-risk or those with an unidentified risk profile. Reporting persons are required to maintain internal procedures that ensure compliance with these regulations, including:

• Monitoring business relationships
• Updating customer records
• Submitting suspicious transaction reports to the Financial Intelligence Unit (FIU)

Simplified Customer Identification

The revised regulations also simplify customer identification processes by allowing reporting persons to accept alternative identification documents in exceptional circumstances. These include cases where customers are not citizens or residents of Tanzania, have no possibility of obtaining a national identity card, or their national identity card is lost or expired.

Internal Procedures

Reporting persons must establish internal procedures that ensure compliance with the Anti-Money Laundering Regulations and maintain accurate customer records. These procedures should also enable employees to recognize suspicious transactions and submit reports to the FIU as required by law.

Conclusion

The revised regulations aim to strike a balance between reducing the regulatory burden on financial institutions while maintaining robust safeguards against money laundering, terrorist financing, and proliferation financing. By simplifying CDD measures for low-risk customers, the government hopes to promote a more efficient and effective anti-money laundering regime in Tanzania.