Regulatory Alerts2017-08-30
Circular CN-FIU/2017/14: AML/CFT Risks Associated with Cash-Based Transactions
The Maldives Monetary Authority's Financial Intelligence Unit issued this circular to all regulated financial institutions regarding the heightened money laundering and terrorism financing risks inherent in cash transactions. The regulator advises institutions to implement appropriate customer due diligence measures for large cash transactions that do not align with the customer's expected profile or declared economic purpose. Although no universal threshold is mandated, institutions must establish their own risk-based limits for cash transactions based on customer wealth sources and historical transaction volumes.
بسم الله الرحمن الرحيم
MALDIVES MONETARY AUTHORITY MALDIVES
މޯލްޑިވްސް މަނިޓަރީ އޮތޯރިޓީ ދިވެހިރާއްޖެ
Circular No: CN-FIU/2017/14
August 30, 2017
TO: ALL FINANCIAL INSTITUTIONS
AML/CFT RISKS ASSOCIATED WITH CASH-BASED TRANSACTIONS
This Circular is issued to all Financial Institutions regulated by Maldives Monetary Authority that accept, deposit or allow withdrawal of cash.
While cash remains a preferred and an attractive form of payment in all economies, it has been recognized by financial institutions as well as investigative authorities across the world, that cash is a highly convenient monetary instrument to launder proceeds of crime and finance terrorism activities because of its nature and its wide usage. As the EUROPOL stated in its report in 2015, while not all use of cash is criminal, almost all criminals use cash at some stage during the money laundering process.
Data available to this Unit shows that the volume of cash transactions conducted through Financial Institutions continue to increase, and the amounts involved in cash transactions are considerably large. It has also become apparent that the use of cash has been associated with criminal activities to move funds through Financial Institutions in order to disguise the true origin and the legal economic purpose of transactions.
Therefore, all Financial Institutions are advised to consider the risks associated with cash transactions and to implement the appropriate level of customer due diligence measures on large cash transactions that do not commensurate the expected customer activities depending on the specific customer profile.
While a threshold for large cash transactions could not be specified, Financial Institutions are advised to determine thresholds that can be applied depending on groups of customers, based on expected sources of wealth, the expected transaction volumes that the customer has already declared to the Financial Institution and the purpose of those transactions.
All queries relating to this Circular shall be directed to this Unit to our email address fiu@mma.gov.mv.
Yours sincerely,
[Signature]
Abdulla Ashraf Head of FIU Financial Intelligence Unit
Email: mail@mma.gov.mv | Website: www.mma.gov.mv | Telex: 77144 MMA OPR MF | SWIFT: MMAUMVMV Majeedhee Building, Boduthakurufaanu Magu, Male' 20182 Phone: (960) 330 8679, (960) 330 8682, (960) 331 4940, (960) 331 2343 | Fax: (960) 332 3862