the financial obligations regulations, 2010 1. … · · 2010-03-30training obligations and...

THE FINANCIAL OBLIGATIONS REGULATIONS, 2010

Arrangement of Regulations

Regulations

PART I

PRELIMINARY

1. Citation

2. Interpretation

PART II

TRAINING OBLIGATIONS AND COMPLIANCE PROGRAMME OF FINANCIALINSTITUTION OR LISTED BUSINESS

3. Compliance Officer

4. Functions of the Compliance Officer

5. Recruitment of staff

6. Training of staff

7. Compliance programme

8. Internal reporting to Compliance Officer

9. Legal professional adviser

10. Auditors to review programme

PART III

CUSTOMER DUE DILLIGENCE

11. Identification procedure

12. Beneficial owner

13. Representative applicant

14. Exceptions

15. New business relationship

16. Identity of a business customer

17. Trust fiduciaries

18. Discrepancies in information

19. Anonymous accounts

20. Politically exposed persons

21. Correspondent banking

22. Shell banks

23. Technological developments

PART IV

CUSTOMER DUE DILIGENCE PROVISIONS FOR INSURANCE COMPANIES

24. General requirements

25. Verification of customer identity

26. Reinsurers

27. Payment of claims

28. Payment on surrender of policy

29. Exceptions to verification of identity

30. Transactions not linked

PART V

RECORD KEEPING

31. Records

32. Record keeping procedures

33. Wire transfers

34. Information required for transfer

35. Exemption for wire transfers

36. Continuous analysis

37. Retrospective due diligence

38. Register of enquiries

PART VI

SUPERVISORY AUTHORITY

39. Delegation by Supervisory Authority

40. Measures to ensure compliance

41. Reports to the FIU

PART VII

OFFENCES AND PENALTIES

42. Offences and Penalties

43. Offences by companies etc.

44. Prosecutions

PART VIII

1VIISCELLANEOUS

45. Repeal and Savings

Legal Supplement Part B—Vol. 49, No. 5—19th January, 2010 13

LEGAL NOTICE No. 7

REPUBLIC OF TRINIDAD AND TOBAGO

THE PROCEEDS OF CRIME ACT, CHAP. 11:27

REGULATIONS

MADE BY THE MINISTER OF FINANCE UNDER SECTION 56 OF THE PROCEEDSOF CRIME ACT

THE FINANCIAL OBLIGATIONS REGULATIONS, 2010

PART I

PRELIMINARY

1. These Regulations may be cited as the Financial Obligations Citation

Regulations, 2010.

2. (1) In these Regulations— Interpreta-tion

"applicant" or "applicant for business " means a person seekingto form a business relationship, or carry out a one-offtransaction, with a financial institution or listed business;

"business relationship" means an arrangement between(a) a financial institution and a customer; or

(b) a listed business and a customer, for the carryingout of financial transactions on a regular basis;

"Central Bank" means the bank established and incorporatedunder the Central Bank Act; Chap. 79:02

"Compliance Officer" means the officer designated inaccordance with regulation 3, as the anti-moneylaundering compliance officer, for any financial institutionor listed business;

"Constitution" means the Constitution of the Republic of Chap. 1:01

Trinidad and Tobago;

"cross-border wire transfer" in relation to the transfer ofmoney, means a single wire transfer in which theoriginator and beneficiary of the transfer are located indifferent countries or any chain of such transfers;

"Director" means the Director of the FIU;

"domestic wire transfer" in relation to the transfer of money,means any wire transfer in which the originator andbeneficiary are located in Trinidad and Tobago;

14 Financial Obligations Regulations, 2010

Act No. 11 of2009

FirstSchedule

Chap. 88:01Chap. 4:50

Chap. 35:05

Act No. 15 of2000

"exempt customer" means(a) a public authority; or(b) a financial institution in a country, the laws of

which sufficiently comply with the revised FortyRecommendations of the Financial Action TaskForce;

"Financial Action Task Force" means the task force establishedby the Group of Seven, to develop and promote nationaland international policies to combat money laundering andterrorist financing;

"financial institution" has the meaning assigned to it in the Actand "institution" has the corresponding meaning;

"FIU" means the Financial Intelligence Unit established underthe Financial Intelligence Unit of Trinidad and Tobago Act,2009;

"listed business" means any business activity or professionlisted in the First Schedule to the Act;

"Minister" means the member of the Cabinet to whomresponsibility for finance is assigned;

"money or value transfer service business" means a financialservice that accepts cash, cheques, other monetaryinstruments or other stores of value, in one location andpays a corresponding sum in cash or other form to abeneficiary in another location, by means of acommunication, message, transfer or through a clearingnetwork to which the money or value transfer servicebelongs;

"one-off transaction" means any transaction other than onecarried out in the course of an existing businessrelationship;

"originator" means a person whether natural or legal whoplaces an order with the financial institution or listedbusiness for the transmission of a wire transfer;"public authority" means

(a) Parliament;(b) the Supreme Court of Judicature established

under the Constitution, the Industrial Court,established under the Industrial Relations Act, theTax Appeal Board established under the TaxAppeal Board Act, the Environmental Commissionestablished under the Environmental ManagementAct, the Land Tribunal established under the LandTribunal Act or any other superior court of record;

Financial Obligations Regulations, 2010 15

(c) a court of summary jurisdiction;

(d) a ministry or a department of a ministry;

(e) a service commission established under theConstitution;

(f) the Tobago House of Assembly, established underthe Constitution, the Executive Council of theTobago House of Assembly or a division of theTobago House of Assembly;

(g) a municipal corporation established under theMunicipal Corporations Act;

Chap. 25:04

(h) a regional health authority established under theRegional Health Authorities Act;

Chap. 29:05

(i) a body created by statute, responsibility for which isassigned to a member of the Cabinet;

Cl) a company incorporated or continued under theCompanies Act, which is owned or controlled by Chap. 81:01

the state, other than a company licensed under theFinancial Institutions Act, 2008; or Act No. 25 of

2008(k} a body corporate or unincorporated entity

(i) in relation to any function which it exercises onbehalf of the State; or

(ii) which is supported, directly or indirectly, byfunds appropriated by Parliament and overwhich government is in a position to exercisecontrol;

"Supervisory Authority" means in respect of(a) financial institutions licensed under the Financial

Institutions Act, the Insurance Act, the Exchange ch ap . 84:01

Control Act, or a person who is registered to carry chap. 79:50

on cash remitting services under the Central BankAct, the Central Bank;

(b) persons licensed as a dealer or investment advisorunder the Securities Industries Act, the Trinidad Chap. 83:02

and Tobago Securities and Exchange Commission;or

(c) other financial institutions and listed business, theFIU;

"the Act" means the Proceeds of Crime Act; and Chap. 11:27

"wire transfer" means any transaction carried out on behalf ofan originator, who may be either a natural or a legalperson through a financial institution or a listed business,by electronic means, with a view to making moneyavailable to a beneficiary at another financial institution orlisted business.


(2) In these Regulations, a reference to an amount in Trinidadand Tobago dollars, includes a reference to an equivalent amount in anyother currency.

PART II

TRAINING OBLIGATIONS AND COMPLIANCE PROGRAMME OF A FINANCIAL

INSTITUTION OR LISTED BUSINESS

Compliance 3. (1) Subject to subregulations (2) and (3), a financial institutionOfficer or listed business shall for the purpose of securing compliance with

section 55(3) of the Act and these Regulations, designate a manager orofficial employed at managerial level as the Compliance Officer of thatinstitution or business.

(2) Where the financial institution or listed business employsfive persons or less, the employee who occupies the most senior position,shall be the Compliance Officer.

(3) Where the financial institution or listed business is anindividual who neither employs nor acts in association with anotherperson, that individual shall be the Compliance Officer.

(4) The financial institution or listed business shall beresponsible for training the Compliance Officer in accordance withregulation 6.

4. (1) The Compliance Officer shall

(a) ensure that the necessary compliance programmeprocedures and controls required by these Regulations arein place;

(b) co-ordinate and monitor the compliance programme toensure continuous compliance with these Regulations;

(c) receive and review reports of suspicious transactions, orsuspicious activities made by the staff of the financialinstitution or listed business and report the same to theFIU in accordance with the Act and guidelines issued bythe relevant Supervisory Authority;

(d) maintain records of reports of the type identified inparagraph (c); and

(e) function as the liaison official with the FIU, where theinstitution or business executes the instructions of theDirector.

Functions oftheComplianceOfficer


(2) A financial institution or listed business shall seek theapproval of the relevant Supervisory Authority for the appointment ofthe Compliance Officer, designated under regulation 3(1).

(3) The identity of the Compliance Officer shall be treated withstrictest confidence by the members of staff of the institution orbusiness.

(4) For the purposes of these Regulations, the relevantSupervisory Authority may issue guidelines to financial institutions orlisted business, indicating the circumstances that may be considered indetermining whether a transaction or activity is suspicious.

5. (1) The financial institution or listed business shall utilize best Recruitment

practices of the industry, to determine its staff recruitment policy, with of staff

the use of which, staff of the highest levels of integrity and competenceshall be hired and retained.

(2) The names, addresses, position titles and other officialinformation pertaining to staff appointed or recruited by the financialinstitution or listed business shall be maintained for up to a period ofsix years after termination of employment and made available to therelevant Supervisory Authority when necessary.

(3) The financial institution or listed business shall ensure tothe extent permitted by the laws of the relevant country, that similarrecruitment policies are followed by its branches, subsidiaries andassociate companies abroad, especially in those countries which are notsufficiently compliant with the recommendations of the FinancialAction Task Force.

6. (1) The financial institution or listed business shall make Training of

arrangements for the training of the directors and all members of its staff

staff to equip them

(a) to perform their obligations under

(i) the Act;

(ii) the Financial Intelligence Unit of Trinidad andTobago Act, 2009;

(iii) the Anti-Terrorism Act; At No. 26 of

(iv) these Regulations; and 2005

(v) guidelines on the subject of money laundering issuedunder regulation 4(4); and

(b) to understand the techniques for identifying anysuspicious transactions or suspicious activities.


Complianceprogramme

Internalreporting toComplianceOfficer

(2) The training required by subregulation (1), shall be given insuch a manner that employees at all levels of the financial institution orlisted business, would become capable of detecting suspicioustransactions and other suspicious activities.

7. A compliance programme established under these Regulationsshall be appropriate for the respective financial institutions and listedbusiness and shall be designed to include policies, procedures andcontrols for

(a) customer identification, documentation and verification ofcustomer information and other customer due diligencemeasures;

(b) identification and internal reporting of suspicioustransactions and suspicious activities;

(c) adoption of a risk-based approach to monitoring financialactivities, which would include categories of activities thatare considered to be of a high risk;

(d) external and independent testing for compliance;

(e) an effective risk-based audit function to evaluate thecompliance programme;

(f) internal control and communication as may be appropriatefor the purposes of forestalling money laundering;

(g) retention of transaction records and other information;and

(h) a list of countries, published by the Financial IntelligenceUnit, which are non-compliant, or do not sufficientlycomply with the recommendations of the Financial ActionTask Force.

8. (1) In support of its compliance programmes, a financialinstitution or listed business shall establish internal reporting ruleswhich would

(a) mandate any person employed in a financial institution orwith a listed business, who knows or suspects that atransaction involves the use of, or the proceeds of aspecified offence, to report the matter to the ComplianceOfficer in writing and keep copies of the said report;

(b) mandate the Compliance Officer to consider the report inthe light of any relevant information which is available tohim and any such guidelines issued by the relevantSupervisory Authority, under regulation 4(1)(c) and to


determine whether it gives rise to such knowledge orsuspicion; and

(c) make it obligatory for the Compliance Officer to report theactivity or suspicious transaction to the FIU within theperiod stipulated in the Act, where he makes such adetermination.

(2) The financial institution or listed business shall also ensurethat the Compliance Officer and other employees have timely access tocustomer identification data and other records and relevant informationto enable them to produce reports in a timely manner.

9. (1) Regulation 8 shall not apply where a listed business is a legal Legalionalprofessional adviser and the knowledge or suspicion is based on advice a

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s

or information or other matters which came to him in privilegedcircumstances.

(2) Information or any other matter comes to a professional legaladviser in privileged circumstances, if it is communicated or given tohim or given

(a) by his client or a representative of the client, in connectionwith the provision of legal advice to him;

(b) by another person or his representative, seeking legaladvice from the adviser; or

(c) in connection with legal proceedings or contemplated legalproceedings.

(3) This regulation does not apply in the case of information orother matters, which is communicated or given with a view tofurthering a criminal purpose known to the professional legal adviser.

10. (1) The compliance programme of a financial institution or Auditors tow

listed business shall be reviewed by the internal and external auditorsrevie

programme

engaged by the financial institution or listed business.

(2) In reviewing the compliance programme

(a) the external auditor shall evaluate compliance withrelevant legislation and guidelines and shall submitreports and recommendations annually or with suchfrequency as may be specified by the relevant SupervisoryAuthority, to the Board of Directors of the financialinstitution or listed business and to the relevantSupervisory Authority; and


Identificationprocedure

(b) the internal auditor shall ensure that policies, proceduresand systems are in compliance with the requirements ofthese Regulations and that the level of transaction testing,is in line with the risk profile of the customer.

(3) Where the financial institution or listed business does notengage the services of an external or internal auditor, the SupervisoryAuthority shall assign a competent professional to perform thefunctions outlined in subregulation (2).

(4) The cost of the services of the competent professionalassigned by the Supervisory Authority to review the complianceprogramme under subregulation (3), shall be met by the financialinstitution or listed business.

(5) All auditors or other competent professionals engaged for thepurposes of these Regulations, shall be specifically trained to undertaketheir functions.

PART III

CUSTOMER DUE DILIGENCE

11. (1) Where a financial institution or listed business undertakes afinancial transaction

(a) pursuant to an agreement to form a business relationship;

(b) as a one-off or occasional transaction of ninety thousanddollars or more;

(c) as two or more one-off transactions, each of which is lessthan ninety thousand dollars but together the total valueis ninety thousand dollars or more and it appears, whetherat the outset of each transaction or subsequently that thetransactions are linked; or

(d) as a one-off or occasional wire transfer of six thousanddollars or more or two or more one-off transactions, each ofwhich is less than six thousand dollars, but together thetotal value is six thousand dollars or more and it appears,whether at the outset of each transaction or subsequentlythat the transactions are linked,

the financial institution or listed business shall conduct due diligence inaccordance with this Part and shall make rules for so doing, inaccordance with the categories of risk established under regulation 7.


(2) Whenever a financial institution or listed business knows orhas reasonable grounds to suspect that the funds used for a transactionare or may be the proceeds of money laundering or any other specifiedoffence, the financial institution or listed business shall apply theprocedures or polices identified in this regulation.

(3) The financial institution or listed business shall

(a) request evidence of the identity of the customer inaccordance with its compliance programme establishedunder regulation 7(a) and record all the informationreceived; and

(b) implement any other customer identification policies andprocedures required to prevent money laundering.

(4) Where in the course of a business relationship or one-offtransaction a financial institution or listed business undertakes atransaction with a financial institution or other persons from anothercountry, contact shall be made with appropriate persons in that countryfor satisfactory evidence of the identity of the customer beforecompleting the transaction.

(5) Where satisfactory evidence of identity has not beenobtained, the business relationship or one-off transaction shall notproceed any further and the matter shall be reported to the ComplianceOfficer in accordance with regulation 7(b), (c) and (d).

(6) Where the person to whom satisfactory evidence of identityis presented, knows or has reasonable grounds for believing that theapplicant for business is a money or value transfer service operator,satisfactory evidence of identity shall also include documentsidentifying the official name of the business and its owners or directorsin accordance with this Part.

(7) For the purposes of this regulation, "satisfactory evidence ofidentity" means

(a) in relation to an individual, evidence that is reasonablycapable of establishing or does in fact establish that theapplicant for business is the person whom he claims to be;and

(b) in relation to a corporation or other business arrangement,evidence that the corporation or other business exists andevidence of the identity of its directors, partners or personsof like status in the business arrangement.


Beneficial 12. (1) A financial institution or listed business shall identify andowner verify the identity of the beneficial owner of any accounts held at the

financial institution or listed business or potential accounts and for thatpurpose, shall request original identification documents, data or otherinformation from an applicant for business.

(2) Where a beneficial owner or customer is a legal person orwhere there is a legal arrangement, the financial institution or listedbusiness shall

(a) verify that any person purporting to act on behalf of thelegal person or legal arrangement is so authorized andidentify and verify the identity of that person;

(b) verify the legal status of the legal person or legalarrangement;

(c) understand the ownership and control structure of thelegal person or legal arrangement; and

(d) determine who are natural persons who have effectivecontrol over a legal person or legal arrangement.

(3) In furtherance of subregulation (2), a financial institution orlisted business shall conduct on-going due diligence on or continuousreview of the business relationship and monitor transactionsundertaken in the course of the relationship, to

(a) maintain up to date records of information; and

(b) ensure consistency with the business and risk profile ofthe applicant and where necessary, its source of funds.

(4) Where a financial institution or listed business havingmonitored transactions undertaken in the course of a businessrelationship, knows or has reasonable grounds to believe thatsuspicious activities or suspicious transactions have taken place, theseactivities or transactions shall be reported to the FIU in accordancewith the Act.

(5) For the purpose of this regulation

"beneficial owner" means the person who ultimately ownsand controls an account, or who exercises ultimate controlover a legal person or legal arrangement; and

"legal arrangement" includes an express trust.


13. (1) where an applicant for business acts or appears to act as a Representa-

representative of a financial institution or listed business, the recipient tive applicant

of the application shall

(a) request a written assurance from the applicant that theidentity of the customer has been recorded in accordancewith customer due diligence procedures of this Part; and

(b) take the measures necessary to ensure that the applicantis legally authorized to act for the customer.

(2) The financial institution or listed business shall takereasonable steps to ensure that identification documents provided by anapplicant are authentic and are available to the financial institution orlisted business upon request or without delay.

(3) The identity of the customer referred to in this regulationshall be ascertained by reference to at least two forms of identificationfrom among those listed in regulations 15 and 16.

(4) In the case where the applicant for business acts or appearsto act for a customer, who or which is based in another country, thefinancial institution or listed business may process a transaction underthis regulation only where there are reasonable grounds for believingthat the applicant for business is

(a) regulated by an overseas supervisory authority; or

(b) based or incorporated in a country where there are lawsthat give effect to the revised Forty Recommendations andNine Special Recommendations (on Terrorist Financing) ofthe Financial Action Task Force.

14. Identification procedures under this Part do not require a Exceptions

financial institution or listed business to take steps to obtain evidenceof the identity of a person in any of the following circumstances:

(a) where the financial institution or listed business carriesout a one-off transaction with a third party underregulation 13, pursuant to an introduction effected by aperson who has provided a written assurance thatevidence of the identity of the third party introduced byhim has been obtained and is recorded under proceduresmaintained by him and the person identifies the thirdparty;

(b) in connection with a pension scheme taken out by virtue ofa person's occupation or a contract of employment wherecontributions are made by deductions from wages andassignments of a member's interest is not permitted underthe scheme; or


New businessrelationship

Identity of abusinesscustomer

(c) where there is a contract of long-term insurance or wherea contract of insurance contains no surrender clause andmay not be used as collateral for a loan.

15. (1) The financial institution or listed business shall on initiatinga business relationship or transaction with an applicant, obtainrelevant identification records of the applicant as follows:

(a) full name of the applicant(s);

(b) permanent address and proof thereof;

(c) date and place of birth;

(d) nationality;

(e) nature and place of business/occupation where applicable;

(f) occupational income where applicable;

(g) signature;

(It) purpose of the proposed business relationship ortransaction and source of funds; and

(i) any other information deemed appropriate by the financialinstitution or listed business.

(2) A valid passport, national identification card or driver'slicense shall be proof of identification and shall also be obtained orexamined by the financial institution or listed business.

(3) Where the business relationship involves a foreign customera reference shall be sought from the foreign customer's bank.

(4) Where original documents are not available, copies shall beacceptable only where they are certified by identification.

16. (1) The requirements outlined in regulation 15, withappropriate adaptations, shall apply to a business customer and thefinancial institution or listed business shall verify the identity of thedirectors and other officers of a company, partners of a partnership,account signatories, beneficial owners and sole traders by means ofdocumentary evidence.

(2) In addition, the financial institution or listed business shallobtain, to the extent relevant to a proposed business relationship ortransaction

(a) the Certificate of Incorporation or Certificate ofContinuance;

(b) the Articles of Incorporation;

(c) a copy of the by-laws, where applicable;


(d) management accounts for the last three years for self-employed persons and businesses which have been inoperation for more than three years; and

(e) information on the identity of shareholders holding morethan ten per centum of the paid up share capital of thecompany.

(3) In the event that an applicant for business cannot satisfy therequirements of subregulation (2)(d), the financial institution or listedbusiness may request other forms of proof of the integrity of the sourceof funds to be used for the transaction.

17. (1) Where an applicant for business is a trustee, nominee or Trustfiduciariesfiduciary customer, in addition to the requirements outlined in

regulation 15, the financial institution or listed business shall obtainthe following information:

(a) evidence of the appointment of the trustee by means of acertified copy of the Deed of Trust;

(b) the nature and purpose of the trust; and

(c) verification of the identity of the trustee.

(2) In this regulation, "trustee" includes the settlor, protector,person providing the trust funds, controller or any person holding powerto appoint or remove the trustee.

18. (1) Where at any time, a financial institution or listed business Discrepancies

is in doubt about the veracity of any information previously given by a ii1information

customer, due diligence procedures shall be performed and where thereare discrepancies in the information previously provided, the financialinstitution or listed business shall make every effort to obtain thecorrect information.

(2) Where such information cannot be verified, the financialinstitution or listed business shall discontinue any businessrelationship with the customer and report the matter to the ComplianceOfficer.

(3) On receipt of a report in subregulation (2), the ComplianceOfficer shall consider whether a suspicious report shall be submitted tothe FIU.

19. (1) A financial institution or listed business shall not keep Anonymous

anonymous accounts or accounts in fictitious names and shall identify accounts

and record the identity of customers in accordance with this Part.


Politicallyexposedperson

(2) Where a new account is opened or a new service is providedby a financial institution and the customer purports to be acting on hisown behalf but the financial institution suspects otherwise, theinstitution shall verify the true identity of the beneficial owner and if itis not satisfied with the response of the customer, it shall terminate allrelations with that customer forthwith.

20. (1) In this regulation, "politically exposed person" means aperson who is or was entrusted with important public functions in aforeign country such as

(a) a current or former senior official in the executive,legislative, administrative or judicial branch of a foreigngovernment, whether elected or not;

(b) a senior official of a major political party;

(c) a senior executive of a foreign government-ownedcommercial enterprise;

(d) a senior military official;

(e) an immediate family member of a person mentioned inparagraphs (a) to (d) meaning the spouse, parents, siblingsor children of that person and the parents, siblings andadditional children of the person 's spouse; and

(f) any individual publicly known or actually known to therelevant financial institution to be a close personal orprofessional associate of the person mentioned inparagraphs (a) to (d).

(2) A financial institution or listed business shall putappropriate measures in place to determine whether an applicant forbusiness, an account holder or a beneficial owner is a politically exposedperson.

(3) Where the applicant for business has been found to be apolitically exposed person, in addition to the identification datarequired by regulation 15, further due diligence measures shall beconducted in accordance with this regulation.

(4) The permission of a senior management official of thefinancial institution or listed business is required before establishing abusiness relationship with a politically exposed person.

(5) A financial institution or listed business shall also takereasonable measures to determine the source of wealth and the sourceof funds of the politically exposed person and where the institution or


business has entered a business relationship with the person, it shallconduct enhanced on-going monitoring of that relationship.

21. (1) In this regulation, "correspondent banking" means the Correspondent

provision of banking services by one bank in Trinidad and Tobago ("the banking

correspondent bank") to another bank ("the respondent bank") in aforeign country.

(2) A correspondent bank shall collect sufficient informationabout its respondent bank to

(a) understand fully the nature of the business which it isrequired to undertake and shall only establishcorrespondent accounts with a foreign bank, afterdetermining that it is effectively supervised by thecompetent authorities in its jurisdiction; and

(b) assess the anti-money laundering controls of therespondent bank.

(3) A correspondent bank shall also

(a) obtain approval from senior management beforeestablishing new correspondent relationships;

(b) record the respective responsibilities of the correspondentand the respondent banks;

ensure that the respondent bank undertakes to providerelevant customer identification data to the correspondentbank upon request; and

(d) with respect to "payable through accounts", satisfy itselfthat the respondent bank has verified the identity of andperformed on-going due diligence on the customers whohave access to accounts in the correspondent bank.

(4) A correspondent bank shall also ascertain whether therespondent bank has been the subject of money launderinginvestigations or other regulatory action in the country in which it isincorporated or in any other country.

22. (1) A bank shall not enter or continue a correspondent banking shell banks

relationship with a bank

(a) incorporated in a jurisdiction in which it has no physicalpresence; or

(b) which is unaffiliated with a financial group regulated by a

2 8 Financial Obligations Regulations, 2010

supervisory authority in a country where theRecommendations of the Financial Action Task Force areapplicable.

(2) A financial institution or listed business shall ensure thatthe respondent financial institution or listed business in a foreigncountry does not permit a shell bank to use its accounts.

(3) In this regulation, "affiliate" means a branch, a holdingcompany or a subsidiary company.

Technological 23. (1) A financial institution or listed business shall pay specialdevelopments attention to any money laundering patterns that may arise from

(a) new or developing technology that might favouranonymity; and

(b) use of such technology in money laundering offences,

and shall take appropriate measures to treat with such patterns.

(2) A financial institution or listed business shall put specialknow-your-customer policies in place to address the specific concernsassociated with non-face-to-face business relationships or transactions.

PART IV

CUSTOMER DUE DILIGENCE PROVISIONSFOR INSURANCE COMPANIES

General 24. (1) An insurance company shall undertake its customerRequirements identification procedures in respect of a party entering into an

insurance contract but where the party acts or appears to act on behalfof a principal, the true nature of the principal shall be established andappropriate enquiries made, especially if the policy holder isaccustomed to acting on the instructions of the customer.

(2) If it is necessary for sound business reasons to enter into aninsurance contract before verification of the identity of the customer canbe completed, this action should be subject to stringent controls toensure that any funds payable under the contract are not passed tothird parties before identification procedures are completed.

(3) Any decision to enter into a contract in the circumstances ofsubregulation (2), shall be made by a senior manager and recorded inwriting.

Verification of 25. (1) An insurance company undertaking verification of thecustomer identity of a customer, shall establish to its reasonable satisfaction thatidentity every party relevant to the application for insurance, actually exists.


(2) Where there is a large number of parties to the application,for example, in the case of group life pensions, the requirement of thisregulation may be fulfilled by carrying out identification procedures ona limited group only, such as the principal shareholder, or the maindirectors of a company.

(3) Where a transaction involves an insurer and anintermediary, each party shall consider its own position separately toensure that its own obligations regarding identification and records areduly discharged.

26. Prior to entering into any reinsurance contract, the insurance Reinsurers

company shall verify the identity of the customer to ensure that themonies payable under the reinsurance contract are paid only to bona

fide reinsurers at rates commensurate with the risks that wereunderwritten.

27. Where claims and other monies are to be paid to persons, Payment of

partnerships and other forms of business arrangements, the identity ofclaims

the proposed recipient of those payments shall be the subject ofidentification procedures.

28. Whether a transaction is— Payments onsurrender of

(a) a one-off transaction; or policy

(b) carried on in the course of a business relationship,

and the value of the transaction is ninety thousand dollars or more theidentity of the customer shall be verified before the insurance companysurrenders the payments to the customer.

29. Verification of the identity of a party to an insurance contract is Exceptions to

required— verification ofnot identity

(a) where the applicant for an insurance contract is afinancial institution or listed business operating inTrinidad and Tobago and is regulated by a supervisoryauthority; and

(b) where an insurance company offers the facility of moneydue to the insured in respect of one policy of insurance tofund the premium payments for another policy ofinsurance and the insured uses that facility.

30. In this Part, transactions which are separated by an interval of Transactions

three months or more are not required to be treated as linked —"inked

transactions.


Records

Recordkeepingprocedures

PART V

RECORD KEEPING

31. (1) Subject to regulation 33 a financial institution or listedbusiness, shall retain records of

(a) all domestic and international transactions; and

(b) identification data obtained through the customer duediligence process,

in electronic or in written form, for a period of six years to enable thefinancial institution or listed business to comply with lawful requestsfor information from auditors, other competent authorities and lawenforcement authorities that request these records, for purposes ofcriminal investigations or the prosecution of persons charged withcriminal offences.

(2) The period referred to in subregulation (1), may be extendedat the request of the FIU or other Supervisory Authority.

(3) Transaction records referred to in subregulation (1), shall be

(a) kept in the format specified by the FIU and containsufficient detail to permit reconstruction of individualtransactions; and

(b) made available to the FIU, upon its request.

32. (1) The records referred to in regulation 31, shall contain thefollowing:

(a) details of a transaction, including the amount of and typeof currency used for the transaction carried out by thefinancial institution or listed business, in the course of abusiness relationship or a one-off transaction to providethe evidence necessary for the prosecution of criminalactivity; and

(b) in the case of evidence of identity obtained in accordancewith regulations 15, 16 and 17

(i) a copy of that evidence;

(ii) the address of the place where a copy of that evidencemay be obtained; or

(iii) information enabling the evidence of identity to beobtained a second time, but only where it is notreasonably practicable for the financial institution orlisted business to comply with subregulation (i) or(ii).


(2) The period of six years for which the records referred to inregulation 31(1) shall be kept is determined as follows:

(a) in the case where a financial institution or listed businessand an applicant for business have formed a businessrelationship, at least six years from the date on which therelationship ended; or

(b) in the case of a one-off transaction, or a series of suchtransactions, at least six years from the date of thecompletion of the one-off transaction or, as the case maybe, the last of the series of such transactions.

(3) Where a financial institution or listed business is anappointed representative, its principal shall ensure compliance withthis regulation in respect of any financial transaction carried out by thefinancial institution or listed business for which the principal hasaccepted responsibility.

33. (1) The information listed in regulation 34 concerning the wireoriginator and recipient of the funds transferred, shall be included on transfers

all domestic and cross-border wire transfers.

(2) A financial institution or listed business that participates ina business transaction via wire transfer shall relay the identificationdata about the originator and recipient of the funds transferred, to anyother financial institution participating in the transaction.

(3) Where the originator of the wire transfer does not supplythe transfer identification data requested by the financial institution orlisted business, the transaction shall not be effected and a suspiciousactivity report shall be submitted to the FIU.

34. (1) Domestic and cross-border wire transfers shall be Informationaccompanied by accurate and meaningful identification data on the re"are{l f"r

transferoriginator of the transfer which shall be kept in a format determined bythe FIU.

(2) Information accompanying a cross-border transfer shallconsist of

(a) the name and address of the originator of the transfer;

(b) a national identification number or a passport numberwhere the address of the originator of the transfer is notavailable;

(c) the financial institution where the account exists; and

(d) the number of the account and in the absence of anaccount, a unique reference number.


(3) Information accompanying a domestic wire transfer shall bekept in a format which enables it to be produced immediately, to theFIU.

(4) The financial institution or listed business shall putprovisions in place to identify wire transfers lacking complete originatorinformation so that the lack of complete originator information shall beconsidered as a factor in assessing whether a wire transfer is or relatedtransactions are suspicious and thus required to be reported to the FIU.

35. A wire transfer from one financial institution to another, isexempted from the provisions of this Part, where both the originatorand beneficiary are financial institutions acting on their own behalf.

36. Where a suspicious transaction or suspicious activity report hasbeen submitted to the FIU, as a result of which there is an on-goinganalysis, the financial institution shall

(a) retain the related records for the period requested by theFIU or until otherwise ordered by the Court; and

(b) co-operate fully with any instructions given by theDirector or such other person as he may appoint.

Retrospective 37. Every financial institution or listed business shall conduct duedue diligence diligence on all existing accounts within a time-frame agreed upon, in

consultation with the industry.

38. (1) The financial institution or listed business shall maintain aregister of all enquiries made to them by any law enforcement authorityor other local or foreign authorities acting under powers provided by therelevant laws or their foreign equivalent.

(2) The register shall be kept separate from other records andcontain as a minimum the following details:

(a) the date and nature of the enquiry;

(b) the name and agency of the enquiring officer; and

(c) the powers being exercised.

PART VI

SUPERVISORY AUTHORITY

Delegation by 39. A Supervisory Authority may, with the approval of the Director,Supervisory delegate its function to any person who is suitably qualified orAuthority

experienced in the operations of a specific type of financial institution orlisted business.

Exemptionfor wiretransfers

Continuousanalysis

Register ofenquiries


40. A Supervisory Authority may take such regulatory measures as Measures to

prescribed to ensure compliance with these Regulations in respect of— ensurecompliance

(a) financial institutions licensed under the FinancialInstitutions Act;

(b) insurance companies and intermediaries registered underthe Insurance Act;

(c) exchange bureaus licensed under the Exchange ControlAct;

(d) cash remitting services in accordance with the CentralBank Act;

(e) a dealer or investment advisor licensed under theSecurities Industry Act; and

(f) any other financial institution or listed business inaccordance with the Act and the Financial Intelligence Unitof Trinidad and Tobago Act.

41. (1) Where a Supervisory Authority, in light of any information Reports to the

obtained by it, knows or has reasonable grounds for believing that a FIU

financial institution or listed business has or may have been engaged inmoney laundering, the Supervisory Authority shall disclose theinformation or belief to the FIU as soon as is reasonably practicable.

(2) Subject to subregulation (4), where any person receivesinformation through which he knows or has reasonable grounds forbelieving that a financial institution or listed business has or may havebeen engaged in money laundering or other specified offence, thatperson shall disclose the information to the FIU.

(3) Where any person exercising delegated authority underregulation 39, in the light of any information obtained by him, knows orhas reasonable grounds for believing that someone has or may havebeen engaged in money laundering, that person shall, as soon as isreasonably practicable, disclose the knowledge or belief either to theFM or to the Supervisory Authority by whom he was appointed orauthorized.

(4) Where information has been disclosed to the FEU under thisregulation, the FIU may only disclose the information in connectionwith the investigation of an offence under any law or for the purpose ofany proceedings relating to the offence.

(5) A disclosure made under this regulation shall not beconstrued as a breach of any restriction on the disclosure of information,however that restriction may have been imposed.


PART VII

OFFENCES AND PENALTIES

Offences and 42. A financial institution or listed business which does not complypenalties with these Regulations, commits an offence and is liable on summary

conviction or on conviction on indictment, to the penalty prescribed insection 57 of the Act.

43. (1) Where a company commits an offence under theseRegulations, any officer, director or agent of the company

(a) who directed, authorized, assented to, or acquiesced in thecommission of the offence; or

(b) to whom any omission is attributable,

is a party to the offence and is liable on summary conviction or onconviction on indictment, to the penalty prescribed in section 57 of theAct whether or not the company has been prosecuted or convicted.

(2) Where a partnership commits an offence under theseregulations and it is proved that the partner acted according toparagraph (a) or (b) of subregulation (1), the partner and thepartnership are liable on summary conviction or on conviction onindictment, to the penalty prescribed in section 57 of the Act.

(3) Where an unincorporated association, other than apartnership, commits an offence and it is proved that an officer ormember of the governing body acted according to paragraph (a) or (b) ofsubregulation (1), that officer or member as well as the unincorporatedbody, commits an offence and is liable on summary conviction or onconviction on indictment, to the penalty prescribed in section 57 of theAct.

(4) If the affairs of a body corporate are managed by itsmembers, subregulation (1), applies in relation to the acts andomissions of a member in connection with his functions of management,as if he were a director of the body.

(5) In this regulation

,;partner" includes a person purporting to act as a partner; and

"officer", in relation to a body corporate, means a director,manager, secretary, Chief Executive Officer, member of thecommittee of management or a person acting in such acapacity.

Offences bycompanies


44. Proceedings for an offence under these Regulations may not be Prosecutions

instituted without the approval of the Director of Public Prosecutions.

PART VIII

MISCELLANEOUS

45. (1) The Financial Obligations Regulations, 2009 are hereby Repeal and

repealed.

savings

(2) Notwithstanding the repeal of the Financial ObligationsRegulations, 2009, nothing done pursuant to or actions taken in respectof those regulations are invalid.

Dated this 18th day of January, 2010.

K. NUNEZ-TESHEIRAMinister of Finance

Laid in the House of Representatives this day of , 2010.

Clerk of the House

Laid in the Senate this day of , 2010.

Clerk of the Senate

PRINTED BY THE GOVERNMENT PRINTER, PORT '-OF-SPAINREPUBLIC OF TRINIDAD AND TOBAGO—2010

L.N. No. 213of 2009

the financial obligations regulations, 2010 1. … · · 2010-03-30training obligations and...

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