WHAT ARE THE
Money laundering and terrorism financing laws in Tanzania?
Anti-Money Laundering Act, 2006 (AMLA) and its associated regulations.
- Customer Due Diligence (CDD): Covered entities, including banks, financial institutions, money remitters, attorneys, accountants, and other designated non-financial businesses and professions (DNFBPs), are required to establish and implement risk-based CDD measures. This includes verifying the identity of customers, obtaining beneficial ownership information, and assessing the risk associated with each customer.
- Reporting Suspicious Transactions: Covered entities must report any suspicious transactions or activities that may be related to money laundering, terrorism financing, or other unlawful activities to the Financial Intelligence Unit (FIU) of Tanzania. The reports should be made promptly when suspicion arises.
- Covered Transaction Reporting: Covered entities are required to report cash transactions exceeding a certain threshold and other designated transactions to the FIU. The threshold amount and types of transactions subject to reporting are determined by the regulations.
- Record-Keeping: Covered entities must maintain records of transactions, customer identification information, and supporting documentation for at least seven years from the date of the last transaction. These records should be readily available for examination by regulatory authorities.
- Compliance Programs: Covered entities are expected to establish and maintain effective AML/CFT compliance programs. This includes implementing internal policies, procedures, and controls to detect, prevent, and report money laundering and terrorism financing activities. Staff training and regular independent audits are also important components of these programs.
- International Cooperation: Tanzania actively cooperates with international counterparts in combating money laundering and terrorism financing. This involves exchanging information, cooperating on investigations, and providing assistance to other jurisdictions when requested.
WHO ARE THE
ML/TF regulators in Tanzania and what functions do they perform?
The regulators responsible for overseeing and enforcing anti-money laundering (AML) and counter-terrorism financing (CTF) measures in Tanzania include:
- Financial Intelligence Unit (FIU) – The FIU is the primary agency responsible for preventing and combating money laundering and terrorism financing in Tanzania. It receives, analyses, and disseminates financial intelligence and ensures compliance with AML/CTF regulations.
- Bank of Tanzania (BoT) – The BoT supervises banks and financial institutions, ensuring that they implement effective AML/CTF measures, including customer due diligence and reporting obligations.
- Tanzania Revenue Authority (TRA) – The TRA monitors financial activities related to tax evasion and illicit financial flows, working to detect and prevent money laundering.
- Capital Markets and Securities Authority (CMSA) – The CMSA regulates the securities and capital markets, ensuring that brokers, investment firms, and listed companies comply with AML/CTF laws.
- Tanzania Insurance Regulatory Authority (TIRA) – TIRA supervises the insurance sector, ensuring that insurers and brokers adhere to AML/CTF regulations.
- Gaming Board of Tanzania (GBT) – The GBT regulates casinos and gaming establishments, enforcing AML/CTF compliance to prevent illicit financial activities.
- Fair Competition Commission (FCC) – The FCC investigates financial crimes related to unfair competition, fraud, and money laundering risks in the corporate sector.
- Directorate of Public Prosecutions (DPP) – The DPP prosecutes criminal cases related to money laundering and terrorism financing, working closely with law enforcement and regulatory agencies.
Tanzania is a member of the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) and collaborates with international bodies such as the Financial Action Task Force (FATF) to enhance its AML/CTF framework.
WHAT ARE THE
Industry sectors subject to ML/TF regulations?
The regulated industries and sectors in Tanzania subject to AML and CTF regulations include, but are not limited to:
Tanzania’s AML/CTF framework covers both financial institutions and designated non-financial businesses and professions (DNFBPs) to ensure a comprehensive approach to combating financial crime.
WHAT ARE THE
Penalties for non-compliance with AML/CTF laws?
The penalties for non-compliance with AML/CTF laws in Tanzania include:
- Financial Penalties – Entities that fail to comply with AML/CTF regulations may face fines imposed by regulatory authorities such as the Financial Intelligence Unit (FIU) and the Bank of Tanzania (BoT). These fines can range from TZS 100 million to TZS 2 billion (approximately $43,000 to $860,000), depending on the severity of the violation.
- License Suspension or Revocation – Banks, financial institutions, forex bureaus, and other regulated entities that repeatedly fail to comply with AML/CTF laws may have their licenses suspended or permanently revoked by the BoT or other relevant regulators.
- Criminal Liability – Individuals, including company directors and compliance officers, may face criminal charges for wilful non-compliance or involvement in money laundering activities. Convictions can result in prison sentences of up to 10 years, in addition to monetary fines.
- Seizure and Forfeiture of Assets – Authorities have the power to freeze and confiscate assets linked to money laundering or terrorism financing, including bank accounts, properties, and business assets.
- Reputational Damage – Entities that fail to comply with AML/CTF regulations risk significant reputational harm, leading to loss of customers, business opportunities, and potential restrictions on international financial transactions.
Tanzania’s Anti-Money Laundering Act (AMLA), 2006, as amended, outlines these penalties to ensure strict enforcement and deterrence against money laundering and terrorism financing activities.
WHAT ARE THE
Largest fines for non-compliance with AML/CTF laws?
Tanzanian authorities have taken enforcement actions against financial institutions for failing to comply with Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) laws. Notable fines include:
- I&M Bank – In 2018, I&M Bank was fined 655 million Tanzanian shillings (approximately $285,000) by the Bank of Tanzania (BoT) for failures in customer due diligence and not filing suspicious transaction reports. acfcs.org
- Equity Bank (Tanzania) Ltd – In 2018, Equity Bank faced a fine of 580 million shillings (approximately $252,400) for similar AML compliance failures. acfcs.org
- UBL Bank – In 2018, UBL Bank was fined 325 million shillings (approximately $141,430) due to deficiencies in AML protocols. acfcs.org
- Habib African Bank – In 2018, Habib African Bank incurred a fine of 175 million shillings (approximately $76,145) for AML compliance breaches. acfcs.org
- African Banking Corporation Ltd – In 2018, African Banking Corporation was fined 145 million shillings (approximately $63,100) for AML failures. acfcs.org
- Diamond Trust Bank (DTB) Tanzania Limited – In 2019, DTB was fined 1 billion shillings (approximately $435,000) by the BoT for failing to establish data centers in Tanzania, a regulatory requirement. thecitizen.co.tz
- National Bank of Commerce (NBC) – In 2019, NBC also faced a fine of 1 billion shillings (approximately $435,000) for similar non-compliance regarding data center establishment. thecitizen.co.tz
The Bank of Tanzania (BoT), in collaboration with the Financial Intelligence Unit (FIU), continues to enforce AML/CTF compliance among financial institutions to maintain the integrity of the financial system.