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Regulation Number: R2015/7
Volume: 44 Number: 14 Date: 24 Rabeeul Awal 1436 - 15 January 2015 Thursday

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MALDIVES MONETARY AUTHORITY

Malé, Maldives

REGULATION ON PREVENTION OF MONEY LAUNDERING AND FINANCING OF TERRORISM FOR MONEY TRANSFER BUSINESS AND MONEY CHANGING BUSINESS

CHAPTER ONE

PRELIMINARY PROVISIONS

This regulation is issued under Article 75(3)(h) of Law No. 10/2014 (the Anti-Money Laundering and Counter-Financing of Terrorism Act).

Article 1. Definition
This regulation shall be known as the [Regulation on Prevention of Money Laundering and Financing of Terrorism for Money Transfer Business and Money Changing Business].

Article 2. Name

Article 3. Commencement
This regulation shall take effect from 15 January 2015.

Article 4. Scope
This regulation shall apply to all entities licensed by the Authority for money transfer business or foreign exchange money changing business, unless otherwise stated.

Article 5. Responsibility for Compliance
Every licensed entity shall comply with this regulation. The licensed entity's board of directors shall ensure that its subsidiaries, branches, employees, agents, and any third parties entrusted with its work also comply with the provisions of this regulation. (a) Licensed entities may apply a risk-based approach to compliance with this regulation.

CHAPTER TWO

CUSTOMER DUE DILIGENCE MEASURES

Every licensed entity shall implement the customer due diligence measures specified in this regulation under the following circumstances:

Article 6. Circumstances Requiring Customer Due Diligence (a) When a licensed foreign exchange money changing business conducts a transaction of 50,000/- (Fifty Thousand) Maldivian Rufiyaa or more; (b) When a licensed money transfer business conducts a money transfer transaction from or to the Maldives, or within the Maldives; (c) When there is suspicion of money laundering or financing of terrorism, regardless of the amount or whether it falls under the mandatory due diligence circumstances; (d) When there is suspicion that previously obtained information about the customer is incomplete or unreliable.

Article 7. Identifying Customers, Beneficial Owners, and Third Parties (a) Every licensed entity shall, under the circumstances requiring due diligence, do the following:
(1) Identify the customer and verify their identity; (2) Identify the beneficial owner and verify their identity based on independent, reliable sources; and (3) Understand the purpose and intended nature of the transaction. (b) Where a customer has appointed a representative, the licensed entity shall:
(1) Identify the representative and verify their identity based on independent, reliable sources; and (2) Verify the authorization for representation, retain a certified copy of the power of attorney or equivalent official document, and confirm the copy matches the original. (c) In addition to the information specified in (a) and (b), the licensed entity shall obtain and record the following information regarding the customer, beneficial owner, and third parties:
(1) Full name and any other name used to address them; (2) Identification document number, including citizen ID number, passport number, visa number, company registration number, or business registration number; (3) Registered address, business address, permanent address, current address, and contact information; and (4) Country of incorporation, registration, or nationality. (d) Money transfer service providers shall complete the following when transferring funds at the originator's request:
(1) Identify the originator and verify their identity; (2) Obtain and record sufficient information related to the transfer, including the originator, beneficial owner, beneficiary institution, date, amount, and currency type; and (3) Include the originator's name, address, identification number or passport number, work permit number, account number, or a special reference number assigned to the transaction in the transfer message or payment instruction. (e) Where the beneficiary acts as a beneficiary institution, the licensed entity shall establish and implement appropriate internal policies, procedures, and controls for identifying the beneficiary and managing the receipt of funds. (f) Where the licensed entity acts as an intermediary in the transfer chain, it shall transmit all specified originator information along with the transfer message or payment instruction. (g) Where the customer is a legal person or partnership, the licensed entity shall identify the type of business and the ownership structure. (h) Where the customer is a legal person, the licensed entity shall identify the directors. (i) Where the customer is a partnership, the licensed entity shall identify the partners. (j) Where the customer is a legal arrangement, the licensed entity shall identify the type of business, ownership structure, and beneficial owners, and verify their identities. (k) Where the customer or beneficial owner is a government agency, licensed entities are only required to verify that it is a government agency, unless there is suspicion that the transaction involves money laundering or financing of terrorism. (l) Simplified measures may be applied for transactions deemed low-risk for money laundering or financing of terrorism, subject to verification of identity and due diligence. (m) Licensed entities shall continuously monitor customer transactions to detect unusual or atypical financial activities, update customer identification information, and verify its accuracy. (n) Licensed entities shall verify the identity of customers and beneficial owners based on independent, reliable sources.

Article 8. Verification of Identity

Article 9. Timing of Verification
Unless otherwise specified, licensed entities must identify and verify the identity of the customer or beneficial owner before conducting a transaction.

Article 10. Failure to Complete Due Diligence If due diligence measures are not fully completed, the transaction shall not be finalized. If the situation warrants, it shall be treated as a suspicious transaction and reported to the Financial Intelligence Unit.

Article 11. Non-Face-to-Face Transactions
Licensed entities shall establish appropriate policies and procedures to mitigate money laundering and financing of terrorism risks arising from business relationships and transactions conducted without the customer's physical presence.

Article 12. Additional Measures for High Risk (a) In addition to the due diligence measures specified in this regulation, licensed entities shall implement additional measures for transactions deemed high-risk for money laundering or financing of terrorism. (b) Every licensed entity shall identify and monitor high-risk customers and transactions, and specifically designate the following as high-risk:
(1) Politically Exposed Persons;
(2) Persons from countries without adequate anti-money laundering and counter-financing of terrorism measures; (3) Non-face-to-face business transactions; and (4) Other customers and transactions specified by the Authority. (c) In high-risk situations, licensed entities shall implement additional due diligence measures, including but not limited to:
(1) Obtaining additional information on the customer and beneficial owner; (2) Verifying the source of funds and wealth through appropriate reliable sources; (3) Obtaining senior management approval before conducting the transaction; (4) Conducting enhanced monitoring of transactions and updating obtained information on the customer and beneficial owner; and (5) Implementing additional due diligence measures for the business relationship, monitoring transactions to ensure they align with the customer's known information, risk profile, and business activities, and verifying the source of funds if necessary. (d) The extent of due diligence measures shall be proportionate to the customer's risk profile and the type of transaction. (e) When conducting transactions specified in Article 6, licensed entities shall review prior similar transactions to assess the customer's capability.

Article 14. Monitoring Transactions
(a) Licensed entities shall pay special attention to transactions that are unusual, involve large amounts, or are conducted in atypical ways, if they appear to lack economic or legal purpose. (b) Licensed entities shall pay special attention to transactions with customers residing in countries that do not cooperate with international anti-money laundering and counter-financing of terrorism standards. This includes legal persons. The Financial Intelligence Unit shall provide licensed entities with information on such countries.

CHAPTER THREE

RECORD KEEPING

Article 15. Record Keeping
(a) All licensed entities shall retain business records, documents, and records related to customer due diligence, including documents and records obtained to verify the identity of customers, beneficial owners, and other designated persons. (b) In addition to the information in (a), licensed entities shall retain the following records:
(1) Information obtained to identify and verify identity, and copies of related documents; (2) Documents and records obtained for internal investigations related to suspicious transactions; and (3) Records of suspicious transactions reported to the Financial Intelligence Unit. (c) Records retained under this article shall be kept for the following periods:
(1) Documents and records related to transactions shall be retained for 5 (five) years from the date the transaction was completed. This includes information obtained to identify the customer and other related transaction information. (2) Reports of suspicious transactions submitted to the Financial Intelligence Unit shall be retained for 5 (five) years from the date of submission, unless otherwise directed by the Financial Intelligence Unit.

CHAPTER FOUR

REPORTING AND MONITORING

Article 16. Reporting to the Financial Intelligence Unit Every licensed entity shall submit information requested by the Financial Intelligence Unit in the performance of its duties under the law.

Article 17. Reporting Suspicious Transactions (a) If a licensed entity suspects that specific funds or property are proceeds of crime, or are related to money laundering or financing of terrorism activities, or if suspicious circumstances exist, it shall report this to the Financial Intelligence Unit at the earliest opportunity and no later than 3 (three) working days, explaining the suspicion. (b) If a licensed entity suspects that specific funds or property belong to or are related to any of the following persons, it shall report this to the Financial Intelligence Unit at the earliest opportunity and no later than 3 (three) working days, explaining the suspicion:
(1) Persons designated by the United Nations Security Council under Chapter VII of the UN Charter; and (2) Other persons designated by the Financial Intelligence Unit.

Article 18. Freezing Transactions
(a) No licensed entity shall conduct any transaction suspected of being related to money laundering, financing of terrorism, or proceeds of crime, after providing information to the Financial Intelligence Unit, unless directed otherwise by the Unit. (b) If the Financial Intelligence Unit determines that a reported transaction involves a serious or urgent matter, it may order the transaction to be held and not processed for a period not exceeding 72 (seventy-two) hours. (c) If freezing a transaction is impossible or hinders the identification of the beneficiary, the licensed entity shall immediately notify the Financial Intelligence Unit after conducting the transaction.

Article 19. Reporting Cash Transactions by Money Changing Business Every licensed foreign exchange money changing business shall report cash transactions of 200,000/- (Two Hundred Thousand) Maldivian Rufiyaa or more, or another amount specified by the Authority, to the Financial Intelligence Unit weekly. This applies to linked transactions that meet or exceed the threshold. For this article, cash transactions include transactions conducted with cash, checks, bank drafts, traveler's checks, and other bearer negotiable instruments.

Article 20. Reporting Transfer Transactions by Money Transfer Business Every licensed money transfer business shall report transfers conducted within the Maldives or from the Maldives to the Financial Intelligence Unit weekly. The report shall include wire transfers and electronic transfers.

Article 21. Exemptions from Reporting Transfers Licensed entities are not required to report the following transfers under Article 20(a):
(a) Transfers between licensed entities where both the originator and beneficiary are licensed entities, and the transfer is for the entities' own purposes; or (b) Transfers between a licensed entity and the Authority where both the originator and beneficiary are a licensed entity or the Authority, and the transfer is for the entities' own purposes.

Article 22. Non-Disclosure
Licensed entities, their directors, officers, or employees shall not disclose to the customer or any third party that information has been or will be submitted to the Financial Intelligence Unit, or that a report on money laundering or financing of terrorism has been or will be submitted, or that an investigation is being or will be conducted.

CHAPTER FIVE

PRIVILEGES FOR REPORTING ENTITIES

Good faith submission of reports and information in accordance with this regulation...