Financial Institutions (Anti-Money Laundering) Guidelines, 2000
LEGAL NOTICE NO. 199 OF 2000
Financial Institutions (Anti-Money Laundering) Guidelines, 2000.
In exercise of the powers conferred upon the commissioner of Financial Institutions by section 71 of the Financial Institutions Act 19991. The Commissioner prescribes the following guidelines.
PART I PRELIMINARY
Citation and Commencement
1. These Guidelines may be cited as the Financial Institutions (Anti-Money Laundering) Guidelines 2000 and shall come into operation on the date of publication in the Gazette.
2. In these Guidelines unless the context otherwise requires-
(a) “money laudering“ means any act or attempted act to conceal or
disguise the identity of illegally obtained proceeds so that they appear to have originated from legitimate sources;
‘ ‘suspicious transaction” refers to a transaction which is inconsistent with a customer’s known legitimate business or personal activities or with the normal business for that type of account;
“the Bank” means the Central Bank of Lesotho.
(b) other words used shall have the same meaning assigned to them in the Financial Institutions Act 1999.
3. These Guidelines are meant-
(a) to require financial institutions to establish and maintain specific policies and procedures to guard against the use of the financial system for the purpose of money laundering;
(b) to enable financial institutions to recognise suspicious transactions and to provide an audit trail of transactions with customers who come under investigation; and
(c) to require financial institutions to submit reports and to disclose information on large cash transactions and suspicious transactions.
4. These Guidelines shall apply to all financial institutions in Lesotho.
ANTI-MONEY LAUDERING MEASURES Programmes against money-laundering
5. (1) Financial institutions shall develop programmes against money laudering. (2) The programmes shall include, but shall not be limited to-
(a) internal controls, policies, and procedures including the designation of compliance officers at management level;
(b) customer identification procedures;
(c) record keeping;
(d) recognition and reporting of suspicious transactions; and
(e) education and training of relevant employees.
6. (1) Financial institutions shall not keep anonymous accounts or accounts in fictitious names.
(2) Financial institutions are required to edentify, on the basis of an official or other reliable identifying document and record, the identity of their customers, either occasional or usual, when establishing business relations or conducting transactions.
(3) Without derogating from the generality of sub-guideline (2), that sub- guideline shall apply, in particular-
(a) to the opening of accounts or passbooks;
(b) to fiduciary transactions;
(c) to the renting of safe-deposit boxes;
(d) to the use of safe custody facilities; and
(e) to large cash transactions.
Disclosure of identity
7. (1) In cases where a customer or client of a financial institution opens an account or conducts a transaction on behalf of another person, the financial institution shall require that customer or client to disclose the true identity of the person on whose behalf the account is opened or the transaction is conducted.
(2) Without derogating from the generality of sub-gideline(1), registered companies, corporations, associations, partnerships, foundations, trust, attorney trusts or funds or other bodies or persons which or who do not conduct any commercial or manufacturing business or any other form of commercial operation
in the country where the registered offices of those bodies or persons are located, shall ensure that they comply with these Guidelines.
Records on Customer Identification
8. Financial institutions shall keep records on customer identification such as copies or records of official identification documents like passports, identity cards, driving licences or similar documents, account files and business correspondence for at least 10 years after an account is closed, and these documents shall be made available to law enforcement authorities in the context of relevant criminal procecutions and investigations;
Maintenance of records
9. (1) Financial institutions shall maintain, for a minimum period of 10 years, all necessary records to enable them to comply with information requests from competent authorities.
(2) Such records shall be kept in sufficient form to permit reconstruction of individual transactions (including the amounts and types of currency involved, if any) so as to provide evidence for prosecution in criminal proceedings.
Review of unusual transactions
10. Financial institutions shall review and properly document the background and purpose of all complex, unusually large transactions, and all unusual patterns of transactions, which have no apparent economic or visible lawful purpose.
Report on suspicious transactions
11. If a financial institution suspects that any transaction by a customer may form part of a criminal activity or otherwise constitutes a suspicious transaction, it shall report such suspicions to the law enforcement authorities and the Bank forthwith.
12. Financial institutions and their directors and employees shall not warn their customers when information on suspicious transactions relating to them is being reported to the law enforcement authorities and the Bank.
Co-operation with law enforcement authorities
13. Financial institutions which report their suspicions in accordance with guideline 11, shall follow the instructions from, and otherwise co-operate with, the law enforcement authorities and Bank.
Dealings with foreign persons
14. Financial institutions shall exercise reasonable caution in their business and transactions with persons, including from other countries.
Branches and subsidiaries
15. Financial institutions shall ensure that provisions under this part are also applied to their brances and subsidiaries, especially in countries which do not, or insufficiently, apply these Guidelines.
Staff awareness and training
16. Financial institutions shall take appropriate measures to-
(a) make employees aware of internal controls, policies and procedures put in place to prevent money laundering including those for identification, record keeping and internal reporting; and
(b) provide training to all staff dealing with customers or their transactions on a general appreciation of the background to money laundering and on the required reporting of any suspicious transactions.
PART III REPORTING REQUIREMENT
Large cash transactions
17. (1) Financial institutions shall report, within 30 days from month-end, any transaction above M100,000 involving cash or “near cash” such as travellers cheques, bearer bonds and other easily negotiable monetary instruments to the Bank by using the Large Cash Transactions Report as set out in Schedule I.
(2) Financial institutions may apply, in writing, to the Bank for exemption from the provisions of sub-guideline (1) in respect of certain persons or organisations.
18. Financial institutions shall report any knowledge or suspicion of money laundering related to a specific customer or transaction to the Bank forthwith by using the Suspicious Transactions Report as set out in Schedule II.
PART IV SUPERVISORY ACTION
Failure to comply
19. If a financial institution fails to observe these Guidelines in a flagrant
manner, the Bank may pursue any remedial measures at its disposal, including the imposition of penalty on the financial institution or any of its directors, officers or staff, under section 29 of the Financial Institutions Act 1999.
20. The Financial Institutions (Anti-Money Laudering) Guidelines, 2000[i]are repealed.
S. M. Swaray Governor, Central Bank of Lesotho
Date Due: 30 days from Month End
LARGE CASH TRANSACTIONS REPORT
(Guideline 17 (1)
(Name of Financial Institution)
For the month ending
(Amounts to the nearest thousands)
Particulars of Transaction
Schedule II SUSPICIOUS TRANSACTIONS REPORT
(Name of Financial Institution)
Name of Client
Nature of Transaction (Deposit/ Withdrawals etc)
Reason for suspicion
Reported by: Date :
i Act No. 6 of 1999
Reported by:-------------------------- Signature: Position: