Tanzanian Anti-Money Laundering Regulations: Identification Requirements

The Tanzanian government has introduced new regulations aimed at preventing money laundering and terrorist financing through stricter identification requirements for financial institutions.

Background

These regulations are designed to prevent the misuse of financial systems for illicit activities by strengthening Tanzania’s anti-money laundering regime. Financial institutions must maintain robust customer due diligence procedures that include verifying the identity of customers before establishing a business relationship.

Identification Requirements

Financial institutions must maintain procedures that require the satisfactory production of evidence of identity before establishing a business relationship with a person. This includes obtaining identification documents such as:

• Passports
• National ID cards
• Driver’s licenses

In cases where a prospective customer is not physically present during the identification process, financial institutions are required to take into account suspicion of money laundering or terrorist financing.

Additionally, financial institutions must also identify third parties who act on behalf of customers and obtain information on:

• The purpose of the business relationship
• The intended nature of the business relationship

Ongoing Due Diligence

Financial institutions must conduct ongoing due diligence by scrutinizing transactions undertaken throughout the course of the business relationship to ensure that they are consistent with the institution’s knowledge of the customer. This includes:

• Investigating the source of funds
• Updating information collected under customer due diligence processes regularly

The regulations also require financial institutions to maintain the correctness of particulars as provided under these Regulations, taking into account any Guidelines concerning the verification of identities which may apply.

Reporting Suspicious Transactions

Financial institutions are required to report suspicious transactions to the Financial Intelligence Unit (FIU) in accordance with the format and manner prescribed by the FIU. This includes reporting:

• Currency transactions
• Cross-border transportation of currency
• Electronic funds transfers that may be linked to money laundering or terrorist financing

Enforcement

The Tanzanian government has entrusted the FIU with the responsibility of enforcing these regulations. Financial institutions that fail to comply with the regulations risk facing severe penalties, including:

• Fines
• Imprisonment

Conclusion

The new regulations are a significant step towards strengthening Tanzania’s anti-money laundering regime and preventing the misuse of financial systems for illicit activities.