Preventing Money Laundering and Terrorist Financing: New Regulations for Financial Institutions

New regulations have been introduced in Trinidad and Tobago to combat money laundering and terrorist financing in the financial sector. These measures require financial institutions to verify the identity of their customers, monitor transactions, and establish robust anti-money laundering controls.

Verification of Customer Identity and Transaction Monitoring

Financial institutions must collect identification data from customers, including name, address, date of birth, and ID number. They must also conduct regular due diligence on customers and report any suspicious transactions to the authorities.

Requirements for Transaction Monitoring

• Financial institutions must establish a system for monitoring transactions and identifying potential money laundering activities.
• This includes monitoring cash transactions, wire transfers, and other forms of electronic payment.

Politically Exposed Persons (PEPs)

Financial institutions dealing with PEPs must conduct enhanced due diligence, including verifying the source of their wealth and income. They must also:

Requirements for Dealing with PEPs

• Establish procedures for monitoring transactions involving PEPs.
• Report any suspicious activities to the authorities.
• Obtain approval from senior management before establishing a business relationship with a PEP.

Correspondent Banking

Financial institutions must ensure that their correspondent banks are subject to effective supervision by the competent authorities in their jurisdiction and have adequate anti-money laundering controls in place. They must also:

Requirements for Correspondent Banking

• Establish procedures for monitoring transactions involving correspondent banks.
• Report any suspicious activities to the authorities.
• Obtain approval from senior management before establishing a new correspondent banking relationship.

Insurance Companies

Insurance companies must conduct customer identification procedures in respect of parties entering into an insurance contract. They must also:

Requirements for Insurance Companies

• Establish procedures for identifying and reporting suspicious transactions.
• Verify the true nature of principals if a party acts or appears to act on behalf of another.

Conclusion

The new regulations aim to prevent money laundering and terrorist financing in Trinidad and Tobago by requiring financial institutions to verify customer identity, monitor transactions, and establish robust anti-money laundering controls. By implementing these measures, financial institutions can help protect the integrity of the financial system and prevent illegal activities.