guideline on anti-money laundering and the combating of terrorist ...

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Guideline on Anti-Money Laundering and the Combating of Terrorist FinancingFor this reason, financial institutions do not necessarily need to determine the legality of the source ordestination of the funds.Sources of Terrorist Financing3.3.6 Terrorist financing usually comes for two primary sources. The first source is the financial supportprovided by States or organizations with large enough infrastructures to collect and make fundsavailable to the terrorist organization. This so-called State-sponsored terrorism has declined, and hasbeen replaced by other types of funding. An individual with sufficient financial means may alsoprovide substantial funding to terrorist groups, e.g. Osama bin Laden is thought to have contributedsignificant amounts of his personal wealth to the Al-Qaeda terrorist network.3.3.7 The second major source of funding for terrorism may come from “revenue generating” criminalactivities like kidnapping or extortion. However, terrorist groups may engage in large-scale smuggling,various types of fraud (e.g. through credit cards or charities), thefts and robberies, and narcoticstrafficking.3.3.8 Unlike money laundering, funding for terrorist groups may come from legitimate sources. This fundingfrom legal sources is a key difference between terrorist groups and traditional criminal organisations.For example, community solicitation and fundraising appeals are one very effective means of raisingfunds to support terrorism. Oftentimes, such fundraising is carried out in the name of organizationshaving the status of a charitable or relief organization and in many cases, the charities to whichdonations are given are in fact legitimate in that they do engage in the work they purport to carry out.Most of the members of the organization however, have no knowledge that a portion of the fundsraised by the charity is being diverted to terrorist causes.4. APPLICABILITY OF THE GUIDELINE4.1 This Guideline applies to:-a) Financial institutions licensed under the Financial Institutions Act, 2008 (the FIA) to carry on the“business of banking” or “business of a financial nature”;b) Insurance companies and intermediaries (e.g. salesmen, agents and brokers) registered under theInsurance Act Chapter 84:01 (the IA) to carry on the business of insurance;c) Authorized dealers (i.e. cambios and bureaus de change) registered under the Exchange Control Act;andPage 5 of 75
Guideline on Anti-Money Laundering and the Combating of Terrorist Financingd) Companies engaged in money transmission or remittance business under the Central Bank Act Chapter79:02. This would also include agents of money remitters.4.2 Hereinafter in this Guideline, these institutions will be collectively referred to as financial institutions.Appendices to this Guideline deal with special issues that should be considered by each category of financialinstitution considered in 4.1.4.3 With respect to 4.1 (b), the Central Bank expects insurance companies to extend their AML/ CTF complianceprogrammes to their salesmen and agents. Brokers on the other hand as introducers of business to insurancecompanies must implement their own AML/ CTF compliance programmes.4.4 Financial institutions should ensure that, at a minimum, this Guideline is also implemented in their branchesand subsidiaries abroad. Where the local applicable laws and regulations prohibit the implementation of thisGuideline, the Central Bank must be notified.4.4.1 Financial institutions are required to assess the AML/ CTF regime existing in any jurisdiction in whichits branches and/or subsidiaries operate. Where the branch operates in an overseas jurisdiction andthe AML/ CTF laws and requirements in that jurisdiction exceed the standards required by Trinidad andTobago laws, the branch should adhere to the requirements in the overseas jurisdiction.4.4.2 Where the Trinidad and Tobago AML/CTF requirements exceed those in the host jurisdiction,subsidiaries and branches of the financial institution in those jurisdications should apply the higherstandard to the extent that the host jurisdiction laws and regulations permit.4.4.3 Financial institutions with non-deposit-taking subsidiaries, must take steps to ensure that there isaccess to information regarding the operations, and activities of these subsidiaries in order to ensurethat such subsidiaries are compliant with the AML/CTF laws, regulations, and <strong>guideline</strong>s. Both 4.4.2and 4.4.3 should form part of the group risk management strategy.5. THE LEGISLATIVE AND REGULATORY FRAMEWORK5.1 Section 2.1(a) of this Guideline names the relevant AML/ CTF legislation that applies to all regulated financialinstitutions. The general obligations created under the specific legislation are as follows:-5.1.1 The POCA requires financial institutions to:-Page 6 of 75
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