In the directive, the record of the list of the real owner or his family and related persons should be kept for at least 5 years from the date of such person, the date of retirement, his insurance period or the date of the end of business relationship or business with him.
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Now the insurance companies have to identify the real shareholder (natural person) and the source of his investment among the founding shareholders. Such a provision has been made in the 'Instruction 082 on Preventing Financial Investments in Asset Laundering, Terrorist Acts and Manufacturing or Expansion of Weapons of Mass Destruction' issued by Insurance Authority, the regulatory body of the insurance sector.
The directive will come into effect only 31 days after its issuance. In the directive, the record of the list of the real owner or his family and related persons should be kept for at least 5 years from the date of such person, the date of retirement, his insurance period or the date of the end of business relationship or business with him.
The authority has also asked to collect details according to Section 35 A of the Insurance Act, if there is or appears to be the involvement of a legal person in the founder's share transaction by Bimak.
This is not the first time that directives have been issued to insurance companies regarding prevention of money laundering. In the second week of February last, the Financial Action Task Force (FATF), an international organization that monitors money laundering and terrorist activities, put Nepal on the "grey list", and the authority issued new instructions for the insurance sector. At a time when effective investigation, prosecution and supervision are challenging to bring Nepal out of the 'grey list' within two years, the insurance authority along with the gold and silver business, real estate, casino and cooperative sector has also issued such instructions.
Under the new rules, insurance companies will have to update the identity of existing customers and beneficial owners. According to this, the companies have to record and update the details of customers and beneficial owners so that they can be tested and analyzed at any time when necessary or provided in the prescribed format when required by the regulatory body.
For this, companies must classify the risk of high-risk customers at least once a year, study and update immediately in case the transaction does not match according to the customer identification details.
"When the insurer has doubts about the truth or sufficiency of the information and data mentioned in the customer identification statement, it must ask the insured for other details apart from the previous notice or documents it has," the directive says, "an officer or employee must analyze the information received directly or informally about the customer and make arrangements to update the customer identity and its details." The authority has also asked to implement the system related to customer identity update by demanding from the customer.
"In order to identify customers and real wealth, Bimak must adopt a risk-based customer identification process," the directive says, "to identify, update and request more information for all categories of customers and real wealth, without adopting the same method and process, risk must be estimated according to the trend of the relevant customer, transaction, location and service."
Bimak has instructed the authority to include the updating of customer and beneficial owner identity in its annual policy and program. The authority has also asked Bimak to update the identity and confirmation of existing customers within 6 months for the first time after the issuance of this directive.
Likewise, a new arrangement has been made in the directive to control the criminal activities of insuring under various temptations, for the purpose of obtaining insurance money. In which there is also provision in the directives that one cannot have a desired person in a relationship other than one's immediate family or close relatives, and that the desired person must be properly identified in the relationship.
FATF has given Nepal a two-year action plan to get out of the 'grey list'. In which every four-four months, Nepal has to report the work progress to FATF. In this way, if Nepal's performance is satisfactory in each evaluation, it will be removed from the gray list at the specified time. If the performance is not satisfactory, there is a possibility that FATF will blacklist Nepal.
According to a government official, if the work continues as it has been done so far, and if the government gives a little priority, it will be possible to get out of the 'grey list' within two years. ''The speed at which we have been working since the beginning, if we continue, we can get out of the 'grey list' at the appointed time,'' Sot said, 'but the study, investigation and prosecution have not been effective, the political leadership is working to protect its own people, the challenge remains if major incidents of financial crimes cannot be studied and investigated.'
final beneficiary FATF has also raised questions about who it is. To control the trend of doing business in the name of the second or third person by hiding the real owner, the work of the company registrar office will be done online so that all the real owners (beneficiaries) can be found out from it, sources said. That is why various regulatory agencies are issuing instructions to find out who the final beneficiary is under the direction of the government.
