Financial Crime World

Financial Institutions Must Stay Vigilant Against Money Laundering and Terrorist Financing

Domestic authorities have issued a stern warning to financial institutions (FIs) in the country, urging them to remain vigilant against money laundering and terrorist financing (ML/TF). The authorities emphasized that FIs must take a risk-based approach in identifying and assessing ML/TF risks to ensure the integrity of the financial system.

Common Methods Used by Criminals

According to the authorities, various methods are being used by criminals to launder money and finance terrorism. These include:

  • Identity fraud
  • False identification
  • The use of “gatekeepers” such as lawyers, accountants, and brokers who offer specialist services to facilitate illegal activities

New Payment Technologies and Other Vulnerabilities

New payment technologies, virtual assets, life insurance products, general insurance products, prepaid cards, and tax evasion are also being exploited by criminals to launder money. Non-financial businesses, such as:

  • Travel agencies
  • Car dealerships
  • Cash-intensive businesses

can also be used to legitimize illicit funds.

FIs’ Responsibilities

The authorities warned that FIs must be aware of these risks and take steps to mitigate them. They emphasized the importance of conducting a business risk assessment to identify areas where ML/TF risks are high.

FIs were urged to:

  • Implement robust customer due diligence (CDD) procedures
  • Conduct ongoing monitoring of customers
  • Report suspicious transactions to the relevant authorities

The authorities also stressed the need for FIs to be familiar with the Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) guidelines issued by international organizations such as the Financial Action Task Force (FATF).

Consequences of Non-Compliance

The authorities warned that ML/TF is a serious threat to the financial system and national security, and that FIs have a critical role to play in combating this menace. They emphasized that FIs must prioritize AML/CFT compliance and take a proactive approach in identifying and mitigating ML/TF risks.

Conclusion

In conclusion, the authorities reiterated that FIs must remain vigilant against money laundering and terrorist financing, and take steps to mitigate these risks. The financial system depends on the integrity of FIs, and it is essential that they prioritize AML/CFT compliance to protect their customers and the wider public.