Archive for the ‘Know Your Customer’ Category

Brunei introduces new Legislation to prevent Money Laundering

Wednesday, June 20th, 2012

Brunei has introduced anti-money laundering laws that grant enforcement agencies extensive powers to seize businesses, freeze accounts and compel individuals to list their assets through “unexplained wealth declarations”.

The Criminal Asset Recovery Order and amendments to Anti-Terrorism Order will be created to provide authorities with stronger tools for addressing financial crime

The new legislation significantly strengthen the powers of the Financial Intelligence Unit (FIU), giving them the authority to suspend transactions, access and review information related to the government, financial institutions or non-financial businesses and professions (NFBP) such as realtors, lawyers, accountants and jewellers. All cash transactions above USD 15 000 made through these agents must be reported to FIU, failing which the individual could be jailed for up to five years and fined up to USD 50 000.

So, Know Your Customer (KYC) and Customer Due Diligence (CDD) guidelines used in banks currently become legally binding requirements.

The new rules aim to increase transparency as well as remove procedural complexities contained in previous laws. This legislation repeals the Anti-Money Laundering Act, the Drug Trafficking (Recovery of Proceeds) Act and the Criminal Conduct (Recovery of Proceeds Act) Order.

AML Guidelines to be implemented in Hong Kong

Saturday, February 4th, 2012

Having released consultation conclusions, Hong Kong’s Securities and Futures Commission (SFC) has announced that gazetting of a new set of guidelines on anti-money laundering (AML) and counter-terrorist financing (CFT).

The new AML guidelines will take effect on April 1, 2012. They serve to replace the existing Prevention on Money Laundering and Terrorist Financing Guidance Note published by the SFC. The new guidelines provide guidance to the financial sector that include the operation of the relevant provisions of the Anti-Money Laundering and Counter-Terrorist Financing (Financial Institutions) Ordinance (AMLO).

Gazetted on July 8, the enacted AMLO was conducted by Hong Kong’s Financial Services and Treasury Bureau with a view not only to enhance the AML/CTF regime in Hong Kong’s financial industry but also meet the latest international standards as regards customer due diligence (CDD) and record keeping.

A consultation launched on September 30 invited comments on the proposed guidelines from industry practitioners, trade associations and professional bodies. It ended on November 18, 2011.

HK to introduce new Anti-Money Laundering Guidelines

Wednesday, February 1st, 2012

Following the release of a set of consultation conclusions, Hong Kong’s Securities and Futures Commission (SFC) has announced the gazetting of a new set of anti-money laundering and counter-terrorist financing guidelines. The new guidelines will take effect on April 1, 2012.

The new guidelines will replace the existing Prevention on Money Laundering and Terrorist Financing Guidance Note published by the SFC. They are to provide guidance to the financial industry relating to the operation of the relevant provisions of the Anti-Money Laundering and Counter-Terrorist Financing (Financial Institutions) Ordinance (AMLO).

On July 8, 2011, the enacted AMLO was gazetted after 2 rounds of consultation conducted by Hong Kong’s Financial Services and Treasury Bureau. Its is aimed at enhancing the anti-money laundering and counter-terrorist financing regime in Hong Kong’s financial sector, whoch is neede in order to meet the latest international standards, especially in respect of customer due diligence (DD) and record keeping.

On September 30, 2011, the SFC launched a consultation and welcomed comments on the then-proposed guidelines, and then received submissions until November 18. In general, respondents found the guidelines helpful.

Jersey to revise Due Diligence requirements

Friday, November 25th, 2011

A consultation on proposals to amend the Money Laundering Order 2008 and the Anti-Money Laundering/Countering the Financing of Terrorism (AML/CTF) Handbook has been launched by the Jersey Financial Services Commission (JFSC) with a view to revise customer due diligence requirements.

The Consultation Paper has been launched prior a wider review of the basis for, and scope of, customer due diligence concessions in the Money Laundering Order that will take account of international standards set by the Financial Action Task Force (FATF).

According to the Commission, proposals in the Consultation Paper will clarify the additional customer due diligence measures to be taken when a relationship with a customer is established remotely and money laundering and terrorist financing risk is considered to be higher than usually. Also, the JFSC’s reviewed proposals should provide additional guidance on identifying countries with a higher risk of money laundering or terrorist financing. The proposals in the Paper will specify some additional due diligence measures to be applied where a customer has a connection to Iran or North Korea, and where a customer is considered to present a higher risk as a result of a connection to countries like Bolivia, Kenya, Nigeria, Sri Lanka, Syria, Turkey, etc. As the risk of money laundering or terrorist financing occurring is considered to be less for a particular customer, product or service, the proposals are to extend the circumstances in which it may be appropriate to simplify customer due diligence measures.

Hong Kong consults on AML and CTF Guidelines

Thursday, October 6th, 2011

A consultation has been begun by Hong Kong’s Securities and Futures Commission (SFC) in order to solicit public comments on proposals for a new set of guidelines on anti-money laundering and counter-terrorist financing (AML/CTF). These guidelines will replace the existing Prevention on Money Laundering and Terrorist Financing Guidance Note published by the SFC.

The guidelines seek to provide guidance to the financial industry, relating to the operation of the relevant provisions of the Anti-Money Laundering and Counter-Terrorist Financing (Financial Institutions) Ordinance (AMLO), which is to come into effect on April 1, 2012.

On July 8, 2011, the enacted AMLO was gazetted after 2 rounds of consultation that was conducted by the Financial Services and Treasury Bureau. It is aimed at enhancing the AML/CTF regime in Hong Kong financial sector with a view to meet the latest international standards, especially as regards customer due diligence (CDD) and record keeping.

The Hong Kong Monetary Authority (HKMA), SFC, Insurance Authority and the Customs and Excise Department have together drafted a set of guidelines containing generic guidance that is applicable to all financial institutions.

Anti-Money Laundering Consultation document issued by Ministry of Justice, New Zealand

Thursday, August 12th, 2010

On 9 August, 2010 the Ministry of Justice of New Zealand released consultation document regarding the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (the AML/CFT Act), which was passed in last year October. This document sets out proposals for regulations and codes of practice under the AML/CFT Act, and provides an opportunity to the interested parties to influence the positions established in the new regime, for example, which entities and transactions are to be exempt, applicable threshold values, customer due diligence (CDD), third party reliance and designated business group issues, as well as annual reporting requirements and other issues. The deadline for submission of proposals is 6 September 2010. 

The changes put forward in the proposals concern persons required to be authorised financial advisers  under the Financial Advisers Act 2008 (FAA). These persons will be included within the definition of “reporting entity”, meaning they will be required to comply with all the obligations set by the AML/CFT Act.

Certain exemptions are proposed for a number of entities and transactions, among them lawyers and accountants who provide financial adviser services, securities registries;  general risk-based insurance and reinsurance products, premium funding agreements that relate to insurance products not covered by the AML/CFT Act, low-value life insurance products, workplace-based and low-value superannuation funds, debt collection agencies, and some others. Transitional exemptions are proposed for a number of second-phase entities.

One of the fundamental issues that are not fully covered by the consultation document is that “there is still no guidance on what exactly money laundering is”, while reporting entities will be required to have AML/CFT programmes to detect, manage and eliminate the risk of money laundering.

Money Laundering and Multinationals

Sunday, April 18th, 2010

As all the world makes attempts to fight money laundering, many countries are now requiring insurers to get additional information from their customers with a view to screen out possible launderers. For multinationals who are interested to do business in these countries, this means providing their insurers with a variety of documents obtaining the insurance they need.

It goes without saying that most multinationals are legitimate businesses and they are unlikely to use their insurer to launder money. Still, the insurance industry is vulnerable. In its National Money Laundering Strategy for 2007 report, the US government noted that the insurance industry has undergone a transformation and that it may appear increasingly attractive to money launderers. A range of investment services featuring financial products that can be purchased and subsequently transferred, redeemed, or sold, are now offered by agents and broker, which, according to the report, provides new opportunities for money laundering. The report says that numerous money laundering methods have been used to exploit insurance products, primarily life insurance and annuities.

To remind, some countries have been taking measures to crack down on the problem and improve their reputation in the international community. So, the governments of these countries are requiring insurers to obtain documents and take other actions to ensure not being used by criminal organizations to help launder illicit funds. Imposing these requirements on insurers is carried out by Mexico, Brazil, Argentina, Colombia and Malaysia.

For example, before getting insurance, multinationals with operations in Mexico must provide a number of documents including the following: a certified copy of the act of incorporation, federal taxpayer’s registry, a document that proves the address of the company in Mexico, a certified copy of the document showing the legal authority of the company’s representatives; a copy of the official identification of the legal representative, such as passport or card of military service. If the parent company in the US or Canada is included on the Mexican policy as a named insured or beneficiary, each non-Mexican company that is included under the admitted policy also will have to provide the insurer with similar documentation.

Israeli banks to tighten AML regulations

Monday, December 14th, 2009

Israeli banks will no longer accept deposit checks drawn on Palestinian banks if the details of account holder are not printed on the checks using Latin characters.

This is a move that the Bank of Israel makes towards tightening its anti-money laundering regulations and bank customers identification procedures. It should be noted that the Bank for the first time is setting binding rules for financial activity with banks in the Palestinian Authority.

Supervisor of Banks Rony Hizkiyahu sent to a letter to the banks’ CEOs. He wrote that “there is a gap between international standards and Israel’s current guidelines concerning the prevention of money laundering”. He suggested that proper “know your customer” (KYC) policies and guidelines for regular monitoring of their activities are essential for the stability of the banking system.

IBA to fight money laundering more effectively

Tuesday, October 7th, 2008

The Indian Banks’ Association (IBA) has joined efforts with 10 banks in order to improve the customer verification system and monitoring of transactions. This is made to check money laundering activities in India.

A working committee has been set up by IBA. The committee was headed by ICICI Bank Senior General Manager Sanjay Chaugle. Its task was preparing revised guidance notes on know your customer (KYC) and anti-money laundering operations.

Monitoring of transactions and record keeping in a more automated manner was given a particular attention. Record keeping is automated by means of creating a database for names to filter defaults. The focus will be put on a software that detects suspicious transactions.

The recent focus on anti-money laundering operations and know your customer is part of India’s efforts to join the Financial Action Task Force (FATF). India is going to share details of the legislation amendments with FATF by the end of the year 2008 in order to pave its way for the entry into this group by next year.

Middle Eastern Bank speaks about AML

Sunday, February 24th, 2008

Money laundering worldwide is estimated at USD 1.5 trillion. According to Bahrain Tribune, a senior banker said that money laundering is a serious challenge to the financial institutions in the region and it is difficult for them to take all possible measures in order to keep the businesses clean.

Senior executive group corporate governance at al khaliji, Niall Coburn, said that Know Your Customer principle is continueing to be the cornerstone of anti-money laundering. According to him, corporate governance and international best practices are to assist the financial institutions with developing and advancing areas of businesses. He said that al khaliji is a next generation bank that is implementing international best practice standards to prevent itself from dirty money issues.

Mr. Coburn said that “As part of implementing this goal by adopting international best practice, al khaliji is one of the endorsement partners of Complinet 2nd GCC regulators’ Summit” that was held in Bahrain on February 19 and 20.

Coburn, as a moderator, explained and discussed the financial reliance on banks for long-term infrastructure development and the pressure to expand and consolidate. He also discussed such issues as the growth of Islamic Banking and compliance and corporate standards.