Banking Institutions Must Prioritize Staff Training and Awareness on Money Laundering
To combat money laundering and terrorist financing (ML/TF) activities in the financial sector, the Financial Intelligence Unit (FIU) has issued guidelines for banking institutions to implement effective measures against ML/TF. One of the key requirements is to provide extensive training to staff on the prevention of ML/TF.
Staff Training
Banking institutions must provide comprehensive training programs for their staff, which should include modules on:
- The Anti-Money Laundering Act 2006
- Internal policies and procedures
- Requirements for verifying identity, retaining records, and disclosing suspicious transaction reports
The FIU emphasizes that staff awareness is crucial in detecting and reporting suspicious transactions. Therefore, banking institutions are required to conduct regular refresher training sessions to ensure that staff remain up-to-date with new trends and patterns of criminal activity.
Money Laundering Reporting Officer (MLRO)
The guidelines highlight the importance of a designated MLRO who will be responsible for receiving and investigating suspicious transaction reports. The MLRO must receive extensive training on all aspects of the legislation and internal policies, as well as validation, investigation, and reporting of suspicious transactions.
Protection of Reporting Persons and Staff
Banking institutions, their directors, officers, and employees are protected by Section 22(1) of the Anti-Money Laundering Act 2006 from criminal and civil liability for breach of any restriction on disclosure of information imposed by contract or by any legislative, regulatory, or administrative provision. This provision aims to encourage reporting of suspicions in good faith.
Tipping Off Prohibition
Banking institutions are prohibited by Section 20 of the Anti-Money Laundering Act 2006 from disclosing to customers the fact that a suspicious transaction report or related information is being reported to the FIU.
Review and Feedback Mechanism
The guidelines encourage banking institutions to compile and record any comments arising relative to these Guidelines and forward them to the Financial Intelligence Unit for its appropriate action. This feedback mechanism aims to improve the effectiveness of the guidelines and identify areas for improvement.
Effective Date
These guidelines become effective on April 1, 2009.
Examples of Suspicious Transactions
The FIU has provided examples of suspicious transactions that may indicate ML/TF activities, including:
- Unusually large cash deposits made by an individual or company
- Substantial increases in cash deposits without apparent cause
- Customers who deposit cash using numerous credit slips
- Company accounts with transactions denominated by cash rather than cheques and other instruments
- Customers transferring large sums of money to or from overseas locations
By implementing these guidelines, banking institutions can play a critical role in preventing ML/TF activities and protecting the financial system.