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Solomon Islands Tightens Know Your Customer (KYC) Regulations

The Solomon Islands Financial Intelligence Unit has issued a new guideline aimed at preventing money laundering and combating the proceeds of crime. The guideline, which came into effect on January 1, 2013, outlines the minimum Know Your Customer (KYC) risk-based classification for individual bank customers.

Classification System

Under the new regulations, financial institutions are required to classify their customers based on their risk level, taking into account factors such as customer background, country of origin, value of transactions, and type of services or products provided. The classification system divides customers into three categories: high-risk, medium-risk, and low-risk.

High-Risk Customers

  • Associated with urban areas
  • Senior public officers
  • Military officials
  • Politically exposed persons (PEPs)
  • Offshore customers
  • Non-face-to-face customers
  • Blacklisted countries’ customers
  • Individuals with a minimum transaction value of SBD 50,000 or higher
  • High net worth individuals

To comply with the regulations, financial institutions must obtain two documents: one from Category A (official documents) and one from Category B (other authority-issued documents).

Medium-Risk Customers

  • Associated with urban and rural areas
  • Non-residents
  • Residents
  • Transactions valued between SBD 15,000 to SBD 50,000
  • Individuals with multiple or single signatory accounts

To comply with the regulations, financial institutions must obtain two documents: one from Category B (other authority-issued documents) and one from Category C (other identification).

Low-Risk Customers

  • Associated with village and rural areas
  • Local salaried and wage earners
  • Transactions valued at a maximum of SBD 15,000 or less
  • Individuals with multiple or single signatory accounts

To comply with the regulations, financial institutions must obtain one document: either from Category B (other authority-issued documents) or Category C (other identification).

Timing of KYC Identification Submission

Financial institutions are required to submit KYC identification for:

  • High-risk customers within two working days
  • Medium-risk customers within a week
  • Low-risk customers within two weeks

The new guideline aims to strengthen the country’s anti-money laundering and combating the financing of terrorism regime. Financial institutions that fail to comply with the regulations may face penalties and fines.

Sources

  • Solomon Islands Financial Intelligence Unit. (2013). Minimum KYC Risk-Base Classification for Individual Bank Customers.