Banks advised to tighten anti-money laundering controls

Banks must strengthen internal control systems to mitigate the risk of money laundering or being used as channels of terrorism funding.
Melnick speaks during the meeting. The New Times / Courtesy
Melnick speaks during the meeting. The New Times / Courtesy

Banks must strengthen internal control systems to mitigate the risk of money laundering or being used as channels of terrorism funding.

Roy Melnick, an associate director at PricewaterhouseCoopers, said banks need to have strong monitoring and reporting systems, measures to screen customer’s payments and capital flow, as well as conducting internal audits.

He noted that with such safeguards, it is easy for financial institutions to thwart crimes like money laundering and being used as channels of funds to finance terrorism activities.

“You must spend 80 per cent of your time conducting operational controls and mitigating risks of money laundering, 10 per cent on customer compliancy, and only 10 per cent on managing issues of financial crime,” Melnick told bankers during a breakfast meeting in Kigali last week.

He advised banks to always conduct extensive surveys before partnering with international banks, saying this reduces exposure to such risks.

Javan Sangano, the head of risk management KCB Rwanda, said that the risks of money laundering and financing terrorists can only be mitigated through application of strong information and technology systems.

“Strengthening internal controls should be coupled with skilled personnel who can track some of these cases,” Sangano said.    

Amina Musanganya, the director of quality assurance and internal audit division, said effective anti-money laundering and combating the financing of terrorism regimes are essential to protect the integrity of markets as they help mitigate the factors that facilitate financial abuse.

In a bid to boost investors confidence, Rwanda passed the anti money laundering and combating financing of terrorism law in 2008.

Rwanda National Police spokesperson, ACP Damas Gatare, said to prevent money laundering and terrorism financing, they have partnered with other stakeholders and have information sharing mechanisms to reinforce monitoring. Gatare said they have also nominated anti-money laundering reporting officers in banks and other financial institutions, put directives on suspicious transactions in banks and ensuring identification of customers in banks as a requirement by the law established.

Law number 47 / 2008 of 09/09/2008 is on prevention and penalising the crime of money laundering and financing terrorism and Presidential Order N°27/01 of 30/05/2011, determines the organisation, functioning and mission of the financial investigation unit, which is under Rwanda National Police.

Last year police intercepted about Rwf714m at Kigali International Airport bound for Rwanda under suspicious circumstances.

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