Institutions move at snail’s pace for FIU directions/stipulations

Questions are being raised by professionals and authorities over how receptive certain entities are to the regulations and stipulations by the FIU (Financial Intelligence Unit) of the Central Bank (CB).

The FIU over the past few months has made stipulations and directed entities such as the Inland Revenue, the real estate sector, the Exchange Control Department, and the Gem, and Jewellery Authority along with lawyers and accountants on certain directions as well as stipulated certain agencies to regulate them better.

All these are either moving at a very slow pace or not at all, which is concerning authorities.

For instance, the real estate industry is to set up a task force to identify risks and traits of money laundering that will lead to establishing a regulatory authority after a big push by the anti-money laundering authority.

This was prompted by the Financial Action Task Force listing the real estate sector as a high-risk area in money laundering in the country. Minimal work has been done in this regard.

Gem and Jewellery dealers are considered Designated NonFinancial Businesses and Professions (DNFBPs) under the Financial Transactions Reporting Act, No. 6 of 2006 (FTRA). The money laundering terrorist financing (ML / TF) risk assessment conducted for the country in 2021/22 confirmed the gem and jewellery sector's medium exposure to ML/TF risks which is a combination of medium threat level, and medium level vulnerability of the sector, and it was requested to follow certain guidelines which haven't been done.

In a move to identify, assess, and manage Money Laundering (ML) and Terrorist Financing (TF) risks, the FIU directed lawyers and notaries to assess verification before performing client activities.

Attorneys-at-law and Notaries are legally bound to obey ML and illegal funds management regulations when executing transactions for their clients in buying and selling real estate and managing client funds. These regulations require legal professionals to report the attempted transaction as a suspicious one to the FIU if the client fails to provide satisfactory evidence regarding the said transaction. The Business Times learns that so far this also is moving at a very slow pace.

FIU officials were uncontactable for comment.