Natural Resources and Violent Conflict - WaterWiki.net

196 winer and roule(b) to identify and verify that any person acting on behalf of the customeris authorized to do. Second, firms should maintain, for atleast five years, all necessary records on transactions, domestic or international,to enable them to comply with official requests for information.Such records must be sufficient to permit reconstruction ofindividual transactions so as to provide evidence for criminal prosecutionif necessary. Financial institutions should keep records oncustomer identification (for example, copies or records of official identificationdocuments like passports, identity cards, driving licenses, orsimilar documents), account files, and business correspondence for atleast five years after the account is closed. These documents should beavailable to domestic authorities in the context of relevant criminalprosecutions and investigations.To improve the diligence of firms, if a financial institution suspectsthat funds stem from a criminal activity, including the evasion of taxesdue on the sale of natural resources, or represent the proceeds of anyform of corruption, it should be required to report promptly these suspicionsto the authorities.Financial institutions should develop programs to assure properoversight of commodities. These programs should include, at a minimum,(a) the development of internal policies, procedures, and controls, includingthe designation of compliance officers at the management level, andadequate screening procedures to ensure high standards when hiringemployees, including reference to prevention and detection of transactionsinvolving the proceeds of illicit resource extraction; (b) issuance ofinstructions regarding red flags for transactions or accounts that may involvethe proceeds of illicit resource extraction; (c) an ongoing employeetraining program; and (d) an audit function to test the system.Measures to Cope with the Problem of Countries with No orInsufficient Anti–Money Laundering Measures. Firms should ensurethat the recommended principles are also applied to branches andmajority-owned subsidiaries, wherever they are located, including incountries that do not apply or insufficiently apply these recommendations,to the extent that local applicable laws and regulations permit.When local applicable laws and regulations prohibit this implementation,competent authorities in the country of the parent institutionshould be informed that the financial institution cannot apply theserecommendations.Firms should give special attention to business relations and transactionswith persons, including companies and financial institutions, fromcountries that do not or insufficiently apply these recommendations.Whenever these transactions have no apparent economic or visible