Financial Institutions Urged to Verify Customer Identity, Report Suspicious Transactions

Preventing Money Laundering and Terrorist Financing

In a move aimed at preventing money laundering and terrorist financing, financial institutions have been mandated to take reasonable measures to establish the true identity of customers involved in transactions. According to the Anti-Money Laundering and Counter Terrorist Financing Act No.29, reporting persons must verify the identity of customers and report any suspicious transactions to the Financial Intelligence Unit (FIU).

Requirements for Reporting Persons

• Verify the identity of customers and maintain records of all transactions above a certain threshold
• Keep records for at least five years from the completion of the relevant business or transaction
• Record information such as:
  • Name
  • Address
  • Occupation
  • Business activity
  • Nature and date of the transaction

Reporting Suspicious Transactions

Reporting persons are required to report suspicious transactions within 24 hours of forming a suspicion. This includes taking reasonable measures to:

• Ascertain the purpose of the transaction
• Determine the origin and ultimate destination of the funds or property involved
• Identify and address any ultimate beneficiary

A report of the suspicious transaction must be prepared in the manner prescribed by regulations and communicated to the FIU by secure means.

Consequences of Non-Compliance

Failure to comply with these requirements can result in:

• Fines for individuals
• Imprisonment for individuals
• Fines three times the market value of the property involved for body corporates

Strengthening Financial Institutions’ Ability to Detect and Prevent Money Laundering and Terrorist Financing

The act aims to strengthen financial institutions’ ability to detect and prevent money laundering and terrorist financing, thereby protecting the integrity of the financial system.