Financial Crime World

FINANCIAL INSTITUTIONS MEET ANTI-MONEY LAUNDERING REGULATIONS

Introduction

A recent review has confirmed that local financial institutions in Tanzania have been consistently conducting transactions in line with their knowledge of customers, businesses, and risk profiles, including the source of funds.

Meeting Ongoing Due Diligence Requirements

According to new regulations, Section 10C(1)(b) of the Anti-Money Laundering and Combating the Financing of Terrorism Act (AMLCFTA), reporting persons are required to conduct ongoing due diligence on business relationships. This includes:

  • Ensuring that documents, data, or information collected under the Customer Due Diligence (CDD) process is kept up-to-date and relevant
  • Undertaking regular reviews of existing records, particularly for higher-risk customers

The review found that financial institutions have been meeting this requirement by conducting regular reviews of their existing records, ensuring they can identify potential risks and take necessary measures to mitigate them.

Understanding Ownership and Control

Section 15A(2) of the AMLCFTA obliges reporting persons to understand the ownership and control of legal persons or arrangements, including information on the nature of each customer’s business. The review confirmed that financial institutions have been meeting this requirement by gathering relevant information about their customers’ businesses and ownership structures.

Identifying and Verifying Customer Identity

The regulations require financial institutions to identify and verify the identity of customers and beneficial owners through reliable sources, such as:

  • Name
  • Legal form
  • Proof of existence
  • Address of registered office

The review found that local financial institutions have been meeting these requirements by conducting thorough due diligence on their customers and beneficial owners.

Extending CDD Measures to Beneficiaries

The regulations extend CDD measures to beneficiaries designated by characteristics or by class, and require reporting persons to obtain sufficient information concerning the beneficiary to satisfy the institution that it will be able to establish the identity of the beneficiary at the time of payout. The review confirmed that financial institutions have been meeting this requirement by gathering relevant information about their beneficiaries and conducting thorough due diligence on them.

Conclusion

The review has found that local financial institutions in Tanzania have been consistently meeting anti-money laundering regulations, including:

  • Conducting ongoing due diligence on business relationships
  • Understanding ownership and control of legal persons or arrangements
  • Identifying and verifying the identity of customers and beneficial owners
  • Extending CDD measures to beneficiaries

These efforts demonstrate a commitment to preventing money laundering and combating terrorism financing in Tanzania.