Regulatory & Investigations
This legal briefing outlines the highlights of the Anti-Money Laundering (Amendment) Regulations of 2019 (the Amendments) which came into force on 24 May 2019. The amendments have been incorporated into the Anti- Money Laundering Regulations of 2012 (the Regulations) and are read as one. Combatting money laundering and terrorist financing is undertaken by the Financial Intelligence Unit (the FIU) which is an extra-Ministerial Department under the Ministry of Finance.
Reporting Persons including; banks and financial institutions, cash dealers, accountants, real estate dealers, dealers in precious stones, work of arts or metals, regulators, customs officers, attorneys, notaries and other independent legal professionals as well as auctioneers will require the following information from customers/clients prior to undertaking transactions:
Local entities are required to submit their board of director’s resolution to a bank/financial institution in order to open and operate a bank account.
Reporting Persons have been required to conduct due diligence to curb money laundering and terrorist financing. They shall monitor the type, purpose and size as well as regularity and geographical location of transactions. They are mandated to use different channels to assess the level of risk, thus the method will be determined on a case by case basis.
To carry out this task, Reporting Persons have to put in place adequate policies and controls which have to be reviewed and approved by the Reporting Persons' board of directors.
There are times when Reporting Persons must apply enhanced due diligence, this will involve more stringent and ongoing monitoring. Enhanced due diligence is required when there is a high risk of money laundering and terrorist financing such as:
To curb abuse and possible harassment, Reporting Persons will need to obtain additional information on the customer to find out the intended nature of business or source of funds and this may require reaching out to the customer/client management.
The Amendments permit Reporting Persons to apply simplified customer due diligence measures but only after making a determination that the business transaction presents a low degree of risk of money laundering and terrorist financing.
Whenever there is default, the FIU is responsible for ensuring compliance and achieves this by putting in place sanctions, among them being a fine not exceeding TZS 5 million and not less than TZS 1 million per day, from the date of the relevant transaction. Take note that the Regulations only provided for the maximum fine.
Please click here to read our previous updater, Revamping the Regulations for Bureaux de Change.
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