Now let us turn to the wider mandate of the FIU with respect to the prevention of money-laundering and combatting the financing of terrorism. The Act singles out Financial Institutions, and defines these along with Designated Non-financial Business or Profession in Schedule 1. Financial Institutions are mainly those engaged in any of the services normally provided by banks and other financial institutions while the second category includes casinos, real estate agents, dealers in precious metals, attorneys-at-law, notaries, other independent legal professionals and accountants engaged in certain specified activities and trustees.
The Act also defines as reporting entities persons carrying on a range of activities, also listed in Schedule 1, including the acceptance of deposits, granting of loans including consumer credit, financial leasing, money transfer agencies, cambios, pawn-broking, issuance of credit cards, travelers cheques, used car and car part dealers, real estate agents, betting shops, lotteries, and transactions undertaken by accountants and attorneys acting for clients in relation to specific activities, exporters and importers of valuable items and dealers in real estate.
Under pain of draconian penalties, financial institutions and reporting entities have serious and extensive obligations under the Act. For the purpose of this column, suffice it to say that reporting institutions and entities are required to maintain adequate records to enable the identification of their customers; to establish and maintain records of all transactions with full particulars of the customers and the transactions; to pay attention to all complex or unusual large business transactions; to monitor their business relationships with customers; to appoint a Compliance Officer to ensure compliance with the Act; to establish and maintain internal policies, procedures, controls and systems to implement the customer identification requirements and recordkeeping and retention requirements; to establish an audit function to test the policies and procedures; and to train their officers, employees and agents to recognise suspicious transactions; and most importantly to submit to the FIU any transaction which they suspect is connected to the proceeds of criminal activity, money laundering or terrorist financing.
Despite defining Designated Non-financial Business or Profession in Schedule 1, the term is not used anywhere in the Act.
Continue reading Those FIU (non)reports – continued