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Tanzania’s Anti-Money Laundering Regulations Tightened
The Tanzanian government has strengthened its anti-money laundering regulations to combat financial crimes and terrorist financing.
Simplified Customer Due Diligence Measures
According to the newly amended regulations, financial institutions are required to apply simplified customer due diligence measures when dealing with customers who present a low degree of risk of money laundering and terrorist financing. The regulations aim to reduce the burden on reporting persons while ensuring that adequate safeguards are in place to prevent financial crimes.
The simplified customer due diligence measures include:
- Verifying the identity of customers and beneficial owners after establishing business relationships
- Reducing the frequency of customer identification updates
- Monitoring transactions to detect unusual or suspicious activities
- Inferring the purpose and nature of a business relationship from the type of transactions or relationship established
Risk Assessment Factors
In determining whether to apply simplified customer due diligence measures, financial institutions must assess risk factors such as:
- Customer risk factors (e.g., public administration, publicly owned enterprises)
- Product or service risk factors (e.g., life insurance policies with low premiums)
- Geographical risk factors (e.g., jurisdictions with effective systems to counter money laundering and terrorist financing)
Guidelines from the Financial Intelligence Unit
The regulations also require financial institutions to take account of guidelines issued by the Financial Intelligence Unit (FIU) in determining customer due diligence measures.
Declaration of Property or Assets
New regulation 36A requires FIU employees who hold leadership positions to submit a written declaration of all property or assets owned by them, their spouses, or unmarried minor children. The declaration must be made in accordance with the Public Leadership Code of Ethics Act.
Increased Fines for Non-Compliance
The regulations have been amended to increase fines for non-compliance with anti-money laundering requirements. Financial institutions that fail to comply with the regulations may face a fine not exceeding five million shillings and not less than one million shillings per day for which a default is committed.
Effective Date
The amendments come into effect immediately and are aimed at strengthening Tanzania’s anti-money laundering regime and preventing financial crimes.