Learn how to recognize and prevent money laundering and terrorist financing risks.
Money laundering is the illegal process of making money generated through criminal activities appear to have come from a legitimate source. The money from the criminal activity is considered dirty, and the process “launders” it to make it look clean. (disguise the source)
The process of laundering money typically involves three stages: placement, layering, and integration.
This educational material is for awareness purposes.
Anti-money laundering (AML) refers to the activities financial institutions perform to achieve compliance legal requirements to actively monitor for and report suspicious activities.
Terrorism is the unlawful use of violence and intimidation, especially against civilians, in the pursuit of political aims. These aims may include, but not limited to:
CFT, or Combating the Financing of Terrorism, refers to a set of standards and regulatory systems intended to prevent terrorist groups from laundering money through the banking system or other financial networks. These practices require accountable institutions to collect identifying information on their clients, as well as the origins of funds.
There are regional and International bodies which issue guidelines to which countries should conform to. In the context of Eswatini, we are a member to Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) which is a regional body. By virtue of our membership to ESAAMLG, we are also members to Financial Action Task Force (FATF) which is an international body. The standards set at international and regional levels must then be incorporated into the country’s legislation.
The FATF has passed recommendations which accountable institutions should adopt in order to comply with international standards. The following laws are relevant to the AML/CFT in Eswatini:
The Central Bank of Eswatini is the regulatory body with regards to AML. It will issue guidelines to Accountable institutions and monitor their compliance to set AML/CFT laws.
The EFIU is an autonomous central national agency responsible for receiving, requesting, analyzing and disseminating to competent authorities' disclosures of financial information in order to counter money laundering and financing of terrorism. As an accountable institution, E-Mali is obliged to report a suspicious transaction to the EFIU.
An ‘accountable institution” means any person, including, but not limited to, a financial institution licensed under the Financial Institutions Act, 2005, who carries on the business or activity of:
By virtue of our mobile money transfer (E-Mali Platform), we are an accountable institution according to the Act.
Although the regulatory bodies have not issued an official definition, by “customer” we understand the following: any person, natural or legal entity, with whom e-Mali has a business relationship by providing a service or product, offered under the scope of activities proper to their field of expertise and in compliance with the established legal and regulatory framework.
An accountable institution should verify the identity of a customer:
Identification of a customer is an important pre-requisite for opening a E-Mali Wallet. No wallet is opened for any person without proper verification of the identity of the person. Careless handling of the matter may give room for undesirable customers to commit fraud, misappropriation and deceive the public. Necessary precaution and strict adherence of norms in this respect can be a check on the activities of miscreants trying to defraud the system.
The “Know Your Customer” (KYC) principle is instrumental in the prevention against money laundering and terrorist financing. Knowing our customers is an essential element in our line of work. By obtaining information on the source of the funds transacted by customers, e-Mali can protect itself from being used to conceal illegally obtained funds.
KYC is not a mere formal requirement that can be met simply by filling out a form, nor is it a passive transaction where the Entity simply requests information, and the Customer provides it. But instead, it is a dynamic, ongoing process by which the company requests information, to know and understand its customers and their financial dealings better.
KYC Due Diligence (in terms of requirements, acceptance level and how frequently information is reviewed) is connected to Customer Risk ratings.
In the context of KYC, identification means establishing, within reason, the true identity of the customer. This is done by recording the information provided by the customer covering the elements of his identity (i.e. name and all other names used, and the address at which they can be located).