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Guideline on Anti-Money Laundering and the Combating of Terrorist Financingfinancial institutions that use payable through accounts to apply enhanced due diligencemeasures in addition to normal measures.12.4.1.(iii.)Wire/funds transfersA wire transfer from one financial institution to another, is exempted from the CDD whereboth the originator and beneficiary are financial institutions acting on their own behalf 25 .Financial institutions are required to apply CDD for one-off or occasional wire transfers ofsix thousand dollars or more.Regulations 33 and 34 of the FOR detail the information required by a financial institutionin respect of wire transfers. Such provisions should be incorporated into the financialinstitution’s compliance programme.Where a financial institution is acting on behalf of another financial institution, its shallensure compliance with applicable law and <strong>guideline</strong>s in respect of any financialtransaction carried out by the financial institution for which it has accepted responsibility.Particular care must be paid to wire transfers emanating from high risk jurisdictionsand/or jurisdictions that do not sufficiently comply with international standards for AML/CTF. Where a relationship is deemed high risk e.g. located in a high-risk jurisdiction,further to standard due diligence, a financial institution should:a) undertake a more detailed understanding of the AML/CTF programme of therespondent bank and its effectiveness;b) review effectiveness of the respondent’s group programme;c) identify the respondent’s owners, director and senior managers; andd) determine the ownership structure.12.4.1.(iv.)Hold Mail and c/o AddressesSometimes the directors or beneficial owners of client companies request that mail notbe forwarded but held at the registered office for storage or later collection. These arenot necessarily suspicious acts but do carry higher risk and should warrant specialattention. Additionally, clients who request “c/o” addresses should also be subject toenhanced due diligence.25 Refer to the FOR, Regulation 35.Page 33 of 75
Guideline on Anti-Money Laundering and the Combating of Terrorist Financing12.4.1.(v.)Transferred AccountsWhere accounts are transferred from another financial institution, enhanced KYCstandards should be applied especially if the financial institution has any reason tobelieve that the account holder has been refused banking facilities by the other financialinstitution.12.5 Business relations in high risk jurisdictions 26Certain countries are associated with predicate crimes such as drug trafficking, fraud and corruption andconsequently pose a higher potential risk to financial institutions. Conducting business relationships withcustomers who are either citizens of, or domiciled in, such countries exposes the financial institution toreputational risk and legal risk.Financial institutions are encouraged to consult publicly available information to ensure that they are awareof countries/territories which may pose a higher risk e.g. FATF and other useful websites.Caution should also be exercised in respect of the acceptance of certified documentation from individualsand entities located in high-risk countries and territories and appropriate verification checks undertaken onsuch individuals/entities to ensure their legitimacy and reliability.The commencement of business relationships with clients residing in high-risk countries must have the priorapproval of senior management. All suspicious transactions originating from such countries must beinvestigated, the findings established in writing and immediately reported to the FIU.13. REDUCED DUE DILIGENCE AND EXEMPT CLIENTS13.1 A financial institution may apply reduced due diligence to a customer provided it satisfies itself that thecustomer is of such a risk level that qualifies for this treatment. Such circumstances are set out below:-a) Where there is a transaction or series of transactions taking place in the course of a businessrelationship, in respect of which the applicant has already produced satisfactory evidence of identity.b) Where an existing customer opens a new account. However, if the source of funds/wealth originatesfrom an external source, or from a country where, for example, it is believed that there is a high level ofdrug trafficking or corruption, reduced due diligence should not apply.26 Refers to countries that appear on FATF public lists of high risk and non-cooperative jurisdictions, UN Lists or any other such lists.Page 34 of 75
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