i. What is a Reporting Entity?
According to section 2 of the Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT Act), a Reporting Entity means any person whose regular occupation or business is the carrying on of-
- Any activity listed in the First Schedule; or
- Any other activity defined by the Minister responsible for Finance as such by an order published in the Gazette amending the First Schedule.
Dealers in Precious Metals (Licensed Gold Dealers) were designated Reporting Entities (RE) as Designated Non-Financial Business or Profession (DNFP) in the First Schedule of the AML/CFT Act including, but not limited to when they engage in cash transactions with a customer equal to or above two million dollars or such lower amount as may be prescribed by the Minister responsible for Finance. As such, all Gold Dealers are required to comply with sections 15, 16, 17, 18 and 19 of the AML/CFT Act 2009.
ii. Obligations as a Reporting Entity
In addition to a Gold Dealers’ obligation to submit reports to the FIU, the Anti-Money Laundering and Countering the Financing of Terrorism legislation imposes a number of other obligations on the Gold Dealer as an RE. These other obligations include:
- Carrying out an assessment of the money laundering and terrorist financing risk your entity may reasonably expect to face.
- Appointing an AML/CFT compliance officer or designating a person to carry out the entity’s compliance function.
- Designing, implementing, and maintaining an AML/CFT compliance programme that sets out procedures, policies, and internal controls for, among other things:
- Ensuring independent audits and reviews of your entity’s Risk Assessment and AML/CFT Programme are conducted.
- screening and training of all employees;
- carrying out due diligence on customers (CDD) – includes customer identification and verification;
- undertaking monitoring and enhanced due diligence for high-risk customers;
- reporting suspicious transactions (STRs);
- submission of terrorist property reports (TPRs);
- effective record-keeping;
- ongoing risk assessment and risk management and risk mitigation programmes, including risk assessment for new products, business practices and delivery mechanisms;
- and keeping update-to-date with new or developing technologies for new and pre-existing products or
- Ensuring that AML/CFT related training is provided to all persons involved in the management of your entity as well as key staff on an ongoing basis.
- Maintaining record of verification of identity of customers; record of customers transactions; as well as a register of ML/TF enquires by the FIU, the Special Organised Crime Unit or other competent authority.
- Ensuring that AML/CFT related training is provided to all persons involved in management of the entity as well as key staff on an ongoing basis.
- Where applicable, reporting entities (financial institutions and money transfer agencies) should obtain the originator or sender’s information and other relevant information for all electronic funds transfers facilitated by the entity.
- Maintaining records or a register of ML/TF enquiries made by the FIU, the Special Organised Crime Unit (SOCU) or any other competent authority.
All records must be kept by the reporting entity for seven (7) years from the date the relevant transaction was completed, or from the date the business relationship with the customer was terminated, whichever is later. All records must also be capable of retrieval in readable form without undue delay.
iii. Sanctions for Non-Compliance
Section 23 of the AML/CFT Act 2009 allows a supervisory authority to impose one or more of the following sanctions and/or supervisory measures on a RE to ensure the RE’s compliance with its obligations under the Act such as:
i. Written warnings;
ii. Order to comply with specific instructions;
iii. Order regular reports from the reporting entity on the measures it is taking;
iv. Prohibit convicted persons from employment in the sector;
v. Recommend to the appropriate licensing authority of reporting that the reporting entity’s licence be suspended, restricted or withdrawn;
vi. In the case of default attributable to directors and senior management of a reporting entity, direct the reporting entity to remove them from the Board or relieve them from their functions to which the default is related and in addition to this sanction, supervisory authorities shall impose a fine of not less than five million dollars ($5,000,000) nor more than fifteen million dollar ($15,000,000).