Financial Institutions Ordered to Verify Customer Identity, Report Suspicious Transactions

In a bid to combat money laundering and terrorist financing, the government has introduced new regulations requiring financial institutions to verify the identity of their customers and report any suspicious transactions.

New Regulations to Combat Money Laundering and Terrorist Financing

Under the Anti-Money Laundering and Counter Terrorist Financing Act No. 29, financial institutions are required to:

• Establish and maintain records of all transactions above a certain amount
• Keep evidence of customer identity
• Keep these records for at least five years from the date of completion of the relevant business or transaction

Reporting Suspicious Transactions

Financial institutions are also required to report any suspicious transactions to the Financial Intelligence Unit (FIU) within 24 hours of forming the suspicion. This includes taking reasonable measures to:

• Ascertain the purpose and origin of the transaction
• Identify and address of any ultimate beneficiary

Internal Reporting Procedures

Financial institutions must establish internal reporting procedures, designating a person to whom employees can report suspicious transactions that come to their attention.

Commitment to Transparency and Security

“We are committed to ensuring that our financial system is not used for illegal activities,” said [Name], Minister responsible for Anti-Money Laundering and Counter Terrorist Financing. “These regulations will help us to identify and prevent money laundering and terrorist financing, and to keep our country safe from these threats.”

Specific Circumstances

The regulations take into account the specific circumstances of each case, including whether the customer is based or incorporated in a country with provisions to prevent the use of the financial system for money laundering or terrorist financing.

Penalties for Non-Compliance

Financial institutions are required to produce evidence of identity if the customer is not a reporting person under the Act, or if the transaction is taking place in the course of a business relationship where the customer has already produced satisfactory evidence of identity. Those who contravene these regulations may face fines and imprisonment.

Key Points

• Financial institutions must verify the identity of their customers
• Records of transactions above a certain amount must be kept for at least five years
• Suspicious transactions must be reported to the FIU within 24 hours
• Internal reporting procedures must be established and maintained
• Penalties may apply for non-compliance with these regulations