System in place to stop money laundering: BSP

BANK South Pacific (BSP) chief executive officer Robin Fleming says all financial institutions are required to conduct customer due diligence according to the Anti-Money Laundering and Counter Terrorist Financing Act 2015.
Fleming said this when responding to questions from The National on the reasons why BSP was stopping some customers from depositing sums of K5,000 and above.
“The rationale behind the requirement to establish the source of deposits or funds is to ensure that the proceeds of crime are not deposited into the banking system,” Fleming said.
“Criminals use banks to launder or clean dirty money and then integrate the clean money into the economy.
“Banks are required to have systems and processes in place to make sure that criminals are not able to use the banking system to launder money,” he said.
“Evidence of the source of funds can be established in various ways, depending on where the funds come from.
“For instance, if the source of funds is from allowances, then a letter from the agency that paid you will be proof of the source of the funds.
“If the source of funds is your pay from your employer then your pay slip will be sufficient. If the source is from sale of goods, then copies of invoices should be provided.
“If you have obtained money from selling property, then a sale and purchase agreement should be provided,” Fleming said.
“If customers are not able to provide evidence of the source of their funds, BSP may not be able to accept the deposits.”
Fleming said customer due diligence is part of what they call KYC (Knowing Your Customer) and includes identifying customers; verifying identification documents; establishing the source of deposits and understanding who funds were transferred to, and the purpose of fund transfers.