ENHANCED CUSTOMER DUE DILIGENCE OBLIGATIONS – ANTI MONEY LAUNDERING AND TERRORISM FINANCING IN CAMEROON AND CEMAC
- Enhanced Due Diligence in the Context of a Cross-Border Correspondent Banking Relationship
When a financial institution or an investment firm other than a portfolio management company maintains a cross-border correspondent banking relationship or a relationship for the distribution of financial instruments with a financial institution located in a third country or not included on the list provided for in the second indent of paragraph 2 of Article 52 of the regulation, which imposes equivalent obligations regarding money laundering and terrorist financing, the financial institution shall, in addition to the measures provided for in Articles 24 and 25, exercise enhanced due diligence measures on the foreign financial institution with which it has a relationship. The modalities of these measures shall be established by Decision of the Ministerial Committee upon a proposal from the COBAC.
- Strengthening Customer Due Diligence
When the risk of money laundering and terrorist financing presented by a customer, product, or transaction is high, the persons referred to in Articles 6 and 7 shall strengthen the measures provided for in Articles 24 and 25 of the regulation.
They shall conduct enhanced due diligence on any particularly complex transaction, or one of an unusually high amount, or one that does not appear to have an economic justification or a lawful purpose. In such cases, these persons shall inquire with the customer about the origin and destination of the funds, as well as the purpose of the transaction and the identity of the beneficiary.
- Prohibition of Correspondent Banking Relationships with a Fictitious Bank
Financial institutions are prohibited from establishing or maintaining a correspondent banking relationship with a credit institution or a company carrying out equivalent activities established in a State where that institution has no effective physical presence enabling it to conduct management and administrative activities, unless it is affiliated with a regulated institution or group.
Financial institutions shall take appropriate measures to ensure that they do not establish or maintain a correspondent banking relationship with a person who themselves maintains correspondent banking relationships that allow an institution established under the conditions indicated in the preceding paragraph to use its accounts.
- Enhanced Due Diligence Measures
When entering into an agreement to provide correspondent banking, check collection, or check discounting services, or to establish a business relationship for the distribution of financial instruments with financial institutions referred to in Article 41 of the regulation, the obligated persons referred to in that article shall:
1) collect sufficient information on the contracting institution to understand the nature of its activities and to assess, based on publicly available and usable information, its reputation and the quality of the supervision to which it is subject;
2) evaluate the anti-money laundering and counter-terrorist financing measures implemented by the contracting institution;
3) ensure that the decision to enter into a business relationship with the contracting institution is made by a member of the executive body or any person authorized for this purpose by the executive body;
4) stipulate in the correspondent banking or financial instrument distribution agreement the procedures for transmitting information at the request of the regulated institution;
5) ensure, when hosting correspondent accounts used directly by independent third parties for their own account transactions as part of correspondent banking services, that the contracting credit institution has verified the identity of clients with direct access to these correspondent accounts and has implemented due diligence measures for these clients in accordance with Articles 24 and 25 of the regulation.
- Specific Measures Regarding Politically Exposed Persons
Without prejudice to the obligations laid down in Articles 23 to 25, 31 and 32 of the Regulation, financial institutions shall take specific measures when they enter into business relationships or when they carry out transactions with or on behalf of Politically Exposed Persons, namely natural persons who hold or have held a prominent public office, as defined in Article 1, paragraph 55 of the regulation.
None of the categories referred to in the preceding paragraph covers persons holding an intermediate or junior-level position. The other relevant categories include, where applicable, positions held at the Community or international level. Subject to the application of enhanced due diligence measures based on a customer risk assessment, financial institutions are not required to consider as politically exposed a person who has not held a senior public office, as defined in paragraph 1 above, for a period of at least one (1) year.
- Recording and Retention of the Results of the Implementation of Enhanced Due Diligence Measures
The results of the review of the implementation of the enhanced due diligence measures prescribed in Article 59 of the regulation, shall be recorded in writing and retained in accordance with the procedures set out in Article 38.