Financial Transparency: Reporting Requirements for Transactions and Business Relationships
In a bid to combat money laundering and terrorism financing, the government has introduced new regulations requiring certain entities to report specific transactions and business relationships. This article provides an overview of the reporting requirements.
Who Must Report?
The following entities are required to report:
- Organizers of casinos, games of chance, including online games of chance, and lotteries
- Entities providing trust management and company registration services
- Dealers in precious metals and dealers in precious stones (for cash transactions above AMD 5 million)
- Reporting entities, their employees, and representatives
What Must Be Reported?
The following types of transactions and business relationships must be reported:
- Buying and selling of real estate
- Managing client property
- Management of bank and securities accounts
- Provision of property for the creation, operation, or management of legal persons
- Carrying out functions involving the creation, operation, or management of legal persons
- Alienation (acquisition) of stocks in the statutory capital of legal persons
- Cash transactions at an amount above AMD 5 million
Suspicious Transactions and Business Relationships
Reporting entities must recognize a transaction or business relationship as suspicious if it is suspected or there are reasonable grounds to suspect that:
- The property involved is the proceeds of a criminal activity or is related to terrorism, terrorist acts, terrorist organizations, or individual terrorists
- The transaction or business relationship is intended to be used for terrorism financing
Entities must also consider recognizing a transaction or business relationship as suspicious if the circumstances match specific criteria or typologies, or if there are other grounds to assume that it may be carried out for money laundering or terrorism financing.
Grounds for Non-Recognition
If relevant consideration does not result in recognizing a transaction or business relationship as suspicious, the grounds for non-recognition, the respective conclusions, and the process of conducting such consideration must be documented.
By introducing these regulations, the government aims to prevent financial systems from being used for illegal activities. Reporting entities are expected to comply with these requirements to ensure transparency and integrity in their transactions and business relationships.