Q&A – 14 January 2013

Money laundering in Bank

We are a large, reliable multinational bank with branches all over the country. Recently under the Anti-Money Laundering Act, we have been asked to produce all kinds of documents over the identity of certain customers? Are we bound to cooperate? The officers following us want thumb prints of these customers who have been banking with us for over 10 years!? Are we supposed to retain these? Is it not primitive for such information to be asked for? How long information should be kept for? Will our insurance cover us if we are fined?
GH, Dar

Whether you are a big, reliable multinational bank or a small undercapitalized inefficiently run bank does not make a difference is as far as the Anti-Money Laundering Act of 2006 (“the Act”) is concerned. In fact some of the biggest money laundering in history has been done through banks.

The Act has clearly defined who a reporting person is which includes cash dealers, accountants, real estate agents, dealers in precious stones, regulator, customs officer, attorneys, notaries public and banks including financial institutions. Hence under the Act your bank is a reporting person and must comply with the act and regulations made thereunder.

There are new regulations made under this Act. Apart from others, regulation 3 is pertinent to your question and although it is lengthy, we reproduce it for you as it is very important. It states:
3.-(1) Where a reporting person is dealing with an individual who is a citizen of, or resident in the United Republic he shall be required to obtain from such person the following information – (a) full names and residential address; (b) date and place of birth; (c) in case of a citizen, voters’ registration card or national identity card or in the absence of such information, a passport, birth certificate or driving license; (d) in case of a resident, a passport, travel document, residence permit or driving license of that person; (e) an introductory letter from relevant authority such as employer or government official; (f) employee identity card with an introductory letter from employer; (g) Tax Identification Number, if such a number has been issued to that person; (h) any or all of, telephone numbers, fax number, postal and e-mail address;
(i) customer residential address including important landmarks close to the prospective customer’s residence; (j) where the customer is a student- (k) an introductory letter from the customer’s institution signed by the head of the institution or a representative of the head of institution; (l) the student’s identity card; (m) nature of business activity; (n) signature and thumb print; (o) utility bills, where applicable.
(2) In case a reporting person is aware or ought reasonably to be aware that the person referred to in sub-regulation (1) does not have the legal capacity to establish a business relationship or conclude a single transaction without the assistance of another person, the reporting person shall, in addition to obtaining the particulars referred to in sub regulation (1), obtain from the person rendering assistance-
(a) full names and residential address; (b) date and place of birth; (c) Tax Identification Number, if such a number has been issued to that person; (d) any or all of, telephone number, fax number, postal and email address; (e) residential address including important landmarks close to his residence; (f) nature of business relationship with the person he is helping; and (g) signature and thumb print. (3) Where the reporting person is taking finger prints under these Regulations, he shall use ink and pad of such quality as to enable the capturing of thumb prints. (4) The thumb prints shall be taken in the following sequence- (a) where that person has both hands, right hand thumb shall be captured; (b) where that persons has no right hand thumb, then the left hand thumb shall be captured; (c) in case that person does not have both thumbs, then the next available finger shall be used, starting with the right pointing finger; and (d) in case that person does not have fingers, the reporting person may take palm or toes print. (5) In case that person lacks both hands and feet, then an exceptional approval from the management of the reporting person shall be obtained after recording such situation.

From the above, it is clear that you must take a thumb print of the person. Further regulation 30 states that a reporting person shall retain records for a minimum period of ten years hence your argument that this is an old customer holds no strength.

The officers who are asking you for the records have all the right to ask you for these. Under the Act, if your bank commits an offence you shall be liable to pay a fine of between Tsh 500M and Tsh 1Bn, or be ordered to pay a fine three times the market value of the property, whichever is higher.
As for your insurance, you will have to look at your policies but from the usual policies we have seen in the market, we doubt that an insurance company would have such a cover for you. Your legal counsel can guide you further.

Insulting national flag

I have a neighbor who is a foreign national. This man owns a dog which he normally describes as his dear life time friend. His love towards this dog is flabbergasting. Recently I have seen that he has made some shirts for this dog to wear. One of these shirts exactly matches our Tanzania national flag. Is this not against the law? Please advice.
TP, Dar

The National Emblems Act is an Act to prescribe the national flag, the coat of arms and the public seal and to control and regulate their use. Under section 7 of this Act any person who does any act or utters any word or publishes any writing with intent to insult or bring into contempt or ridicule the National Flag commits an offence and shall be liable on conviction to a fine not exceeding twenty thousand shillings or to imprisonment for a term not exceeding two years or both.

You may report this to a nearest police station for their necessary step. However offences under this Act require consent of the Director of Public Prosecution in writing before prosecution. If the DPP will satisfy himself on the facts you have posed that an offence has been committed, your neighbor may be prosecuted. The essential ingredient in this offence is the intention to insult or bring into contempt or ridicule the national flag short of which there is no offence.