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INSIGHT

JUN E 1 2 , 2 0 1 9

New Regulations on Electronic Funds Transfer and Cash


Transaction Reporting
Written by Peter Kasanda, Tenda Msinjili, Michaela Marandu and Kankiza Tibaijuka

As part of more robust anti-money laundering measures, the Tanzanian government


has recently released the new Anti-Money Laundering (Electronic Funds Transfer and
Cash Transaction Reporting) Regulations, 2019 (the Regulations). The Regulations
introduce stricter reporting guidelines, as well as mandatory reporting formats.

This Finance Briefing provides an overview of some of the relevant provisions of the Regulations to ensure
professionals are more aware of their heightened obligations.

NO. RELEVANT PROVISION OVERVIEW

1. Information to be This provision requries that banks, accountancy firms and other
contained in similar persons (Reporting Persons) collect a range of
Electronic funds information whenever they process electronic funds transfers
transfer and currency (either domestic or international) or currency transactions (any
transaction cash-based transaction involving deposit, withdrawal, exchange,
(regulation 4 and the payment or receipt of currency in Tanzanian Shillings or any
schedules of the foreign currency).
Regulations)
Amongst other information, the following must be collected:

full address and place of business where the transaction


occurred

date and time of the transaction

value of the transaction

identity documents of the parties involved in the transaction

2. Obligation to report This provision requires that Reporting Persons report to the
currency transactions Financial Intelligence Unit, any currency transaction in
and electronic fund Tanzanian Shillings or foreign currency that is equivalent to US
transfers (regulation 5 $10,000 or more in the course of a single transaction.
of the Regulations)
This provision further asserts that Reporting Persons must
report to the Financial Intelligence Unit, an electronic funds
transfer involving Tanzanian Shillings or foreign currency that is
equivalent to US $1,000 or more, in the course of a single
transaction.

When reporting currency transactions or electronic funds


transfers, Reporting Persons shall fill in and provide the
information set out in the Schedules to the Regulations.

In determining the exchange rate for the purposes of knowing


whether to report a particular transaction or not, Reporting
Persons must pay regard to the official conversion rate of the
Bank of Tanzania that is in effect at the time of the transaction.

3. Circumstances where This provision requires that every attorney, notary or


attorneys, notaries independent legal professional report to the Financial
and independent Intelligence Unit, when they engage in the following types of
legal professionals activities:
shall report currency
transactions assisting a client in preparing or executing transactions
(regulation 6 of the involving the purchase or sale of real property or
Regulations) commercial enterprises

assisting a client in preparing or executing transactions


involving management of funds, securities or other assets
which belong to the client

assisting a client in preparing or executing transactions


involving the opening of bank accounts, saving accounts or
portfolios

assisting a client in preparing or executing transactions


involving the organisation of contributions required to
create or manage or direct corporations or legal entities

assisting a client in preparing or executing transactions


involving the creation, management or direction of
corporations or legal entities including trusts, partnerships,
or associations

assisting a client in preparing or executing transactions


involving the buying or selling of business entities

acting on behalf of a client in any financial or real estate


transaction

The Regulations make it clear that the above shall apply to all
sole practitioners, partners or employed professonals within
professional firms when they engage in any of the
aforementioned activities.

4. Circumstances where This provision requires that every accountant or accounting firm
accountants shall report to the Financial Intelligence Unit, when they engage in
report currency the following types of activities:
transactions
(regulation 7 of receiving or paying funds on behalf of any person or entity
Regulations)
purchasing or selling securities, shares, real properties or
business assets or entities on behalf of any person or entity

transferring funds or securities by any means on behalf of


any person or entity

managing funds on behalf of any person or entity

giving instructions on behalf of any person or entity in


respect of any of the aforementioned activities

The Regulations make it clear that the above shall apply to all
sole practitioners, partners or employed accountants within
accounting firms when they engage in any of the
aforementioned activities on behalf of their employer.

5. An ordering If a Reporting Person transfers funds on behalf of a client, they


institution to will be regarded as an "ordering institution".
maintain information
(regulation 9 of This provision requires that ordering institutions maintain all
Regulations) information that it collects from its clients for a minimum
period of 10 years.

6. Format and period of This provision requires that all Reporting Persons report to the
reporting (regulation Financial Intelligence Unit, electronically or as otherwise
12 of Regulations) required by the Financial Intelligence Unit, within 5 working
days of the date of the relevant transaction or transfer.

7. Imposition of If Reporting Persons fail to comply with the Regulations, the


administration Financial Intelligence Unit or the regulator may, after providing
sanctions (regulation notice in writing to the Reporting Persons, impose any of the
13 of Regulations) following administrative sanctions:

a warning or caution not to repeat the default


a reprimand

a directive to take remedial action or to make specific


arrangements to remedy the default

restriction or suspension of certain business activities

a maximum daily fine of Tanzanian Shillings 5,000,000


(approximately US $2,175), for each day the default was
committed

suspending or removing from office any member of staff


who fails to comply

As at the date of this Finance Briefing, the Regulations are publicly available.

Clyde & Co Tanzania's finance and real estate team have the legal expertise to support borrowers, property owners / developers and investors
that may have any questions on the Act and its implications on the use of landed property to secure debt. We are available to respond to any
legal questions you may have on the subject.

Clyde & Co LLP accepts no responsibility for loss occasioned to any person acting or refraining from acting as a result of material contained in
this summary. Further advice should be taken before relying on the contents of this summary. Clyde & Co Tanzania accepts no responsibility for
loss occasioned to any person acting or refraining from acting as a result of material contained in this summary. No part of this summary may
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ed content
2019 1 6 JAN UAR Y, 2 0 1 8

Regulations on Mortgaging Land Briefing note: Proposed amendments to the


Land Act, 1999

AR Y, 2 0 1 8

ng note: Local Content Regulations


wing amedments to the…

 Authors

Peter Kasanda
Partner

Tenda Msinjili
Senior Associate

Michaela Marandu
Senior Associate
Kankiza Tibaijuka
Associate

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Revamping the Regulations for Bureaux de Change 

 Categories

Sectors

Regulatory & Investigations

Services

Financial Services & Insurance Regulatory & Investigations

Locations

Dar es Salaam

Type

English Legal developments

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