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FIU>Financial Institutions regulated by the FSC

Financial Institutions regulated by the FSC


The following summary of the legislative requirements under the FIAMLA 2002 applies to you if you are a “Financial institution” as defined under the Financial Intelligence and Anti-Money Laundering Act 2002 i.e.:

(a) an institution or a person licensed or required to be licensed under the Insurance Act 2005 or the Securities Act 2005; and

(b) a management company or registered agent licensed or required to be licensed under the Financial Services Act 2007.

Insurance Entities, Management Companies & Investment Businesses

All financial institutions should have a system of internal controls to manage their AML/CFT risks and to provide a systematic and disciplined approach to assuring compliance with AML/CFT laws, codes and standards of good practice. AML/CFT risk management is most effective when an Insurance Entity’s culture emphasizes high standards of ethical behaviour at all levels of the entity. The board of directors and senior management should promote an organisational culture which establishes through both actions and words the expectation of compliance by all employees with AML/CFT laws, codes, standards of good practice and internal policies and procedures when conducting the business. The board of the institution should approve its AML/CFT policy and must establish procedures and allocate responsibilities to ensure that the AML/CFT policy and procedures are managed effectively and are in line with applicable laws, codes and standards of good practice.

Where an employee makes a suspicious transaction report to an MLRO in accordance with an Institution’s internal procedures he/she will have discharged his/her legal obligation to report (pursuant to section 14 of the FIAML Act). Thereafter the Institution has a legal obligation to ensure that the employee’s report is properly evaluated by the MLRO.

Where the MLRO validates an internal suspicious transaction report, he or she must report it and the circumstances surrounding it as soon as possible to the FIU by utilising the form prescribed by the FIU.

It is imperative that all employees are made aware of the identity of the MLRO and Deputy MLRO. Insurance Entities must ensure that employees know how to make suspicious transaction reports and when and why.

Once a suspicious transaction report is made, Licensees must take appropriate measures to ensure that the offence of tipping off is not committed. Licensees must also ensure that any disclosure is made in good faith. An absence of good faith on the part of a Licensee (who for example makes a report maliciously and without reasonable grounds for doing so), renders the Licensee liable to be sued for breach of client confidentiality. Where a disclosure is made in good faith but proves to be groundless, the person disclosing may claim immunity from both civil and criminal action.

For more information, please refer to the Codes on the Prevention of ML/FT issued by the FSC.

For more information on reporting a suspicious transaction, please refer to the reporting section of this website.