Financial Crime World

Tanzania, United Republic of: Know Your Customer Regulations

In Tanzania, financial institutions and professionals are required to adhere to Know Your Customer (KYC) guidelines and regulations. These rules aim to verify the identity, suitability, and risks involved in maintaining a business relationship.

Primary Legislation

The Anti-Money Laundering Act of 2006 is the primary legislation governing anti-money laundering (AML) activities in Tanzania. The law came into effect in 2006 and works alongside other regulations, including:

  • Prevention and Combating of Corruption Act
  • Bank of Tanzania Act
  • Banking and Financial Institutions Act

Financial Intelligence Unit (FIU)

To combat money laundering and terrorist financing, a Financial Intelligence Unit (FIU) has been established as an extra-ministerial department within the Ministry of Finance. The FIU:

  • Receives suspicious transaction reports and other information from reporting persons and sources
  • Analyzes and disseminates this information

Regulatory Bodies in Tanzania

Other regulatory bodies in Tanzania include:

  • Bank of Tanzania
  • Individual banks and financial institutions
  • Capital Markets and Securities Authority
  • Insurance Supervisory Department
  • Gaming Board
  • Other relevant authorities

Know Your Customer (KYC) Identification Process

To conduct a typical KYC identification process, applicants must provide official records reasonably capable of establishing their true identity. This may include:

  • Birth certificates
  • Passports
  • Other forms of identification

For corporate entities, the following documents are required:

  • Copies of Memorandum and Articles of Association
  • Certificate of incorporation
  • Latest annual reports certified by the Registrar of Companies

Verifying Customer Identities

The FIU has issued guidelines for verifying customer identities, including:

  • Verifying full names with official documents
  • Confirming date of birth and nationality
  • Contacting customers by telephone or email to confirm supplied information

For corporate entities, lawyers must verify client information by:

  • Reviewing latest periodical reports and accounts
  • Conducting an enquiry on submitted documents
  • Communicating with registered authorities
  • Undertaking an entity search
  • Utilizing independent information verification processes, including accessing public and private databases

Relying on Third Parties

In Tanzania, it is permitted to rely on third parties who are obliged by law to comply with AML regulations. However, when outsourcing customer due diligence, the primary role of the party that requested the information is to verify and be accountable for the information.

There is no requirement for third-party licenses or registration in Tanzania. Entities that could be relied upon specifically by law as a third party to comply with AML regulations include:

  • Credit institutions
  • Financial institutions
  • Auditors
  • External accountants
  • Tax advisors
  • Notaries
  • Other independent legal professionals