KYC requirements
The know your customer or know your client (KYC) guidelines and regulations for financial services require that professionals try to verify the identity, suitability, and risks involved with maintaining a business relationship.

Legal affairs

National regulatory framework regarding AML and effective date of the regulations

The Anti-Money Laundering Act, 2006 Act No. 12 of 2006 is the main act governing Anti Money Laundering in Tanzania. It came into operation in 2006. It works together with many other laws such as the Prevention and Combating of Corruption Act 2007; the Bank of Tanzania Act, 2006; the Banking and Financial Institutions Act, 2006; the Prevention of Terrorism Act 2002; the Bank of Tanzania Money Laundering Control Circular No. 8 of 2000; the Tanzania Income Tax Act 2004; the Foreign Exchange Act, 1992; and the Tanzania Investment Act 1997;

National regulator or relevant authority for AML controls

Through the Anti-Money Laundering Act (“AMLA”) 2006, a Financial Intelligence Unit (“FIU”) has been created as an extra-ministerial department of the Ministry of Finance controlling Anti Money Laundering in Tanzania. Section 4(2) of the AML Act 2006 empowers the FIU to receive, analyse and disseminate suspicious transaction reports and other information regarding potential money laundering or terrorist financing received from reporting persons and other sources.

There is also a National Multi-Disciplinary Committee on anti-money laundering, which assesses and improves anti-money laundering policies and advises the government on anti- money laundering and other related matters.

Other regulators are the Bank of Tanzania; the Individual Banks & Financial Institutions duly licensed; Capital Markets and Securities Authority; the Insurance Supervisory Department; the Gaming Board; Ministry of Finance (Orders of the Minister); Ministry of Home Affairs; the Attorney General of the United Republic of Tanzania; the Director of Public Prosecution (in the Ministry of Justice and Constitutional Affairs); the Director of Prevention and Combating of Corruption Bureau (PCCB); the Police Force; Business Registration and Licensing Authority; Tanzania Revenue Authority; Customs & Excise Department; Municipal Trade / Licensing Officer; Registration Insolvency & Trusteeship Agency; Registrar of Societies & Non-Governmental Organizations; Immigration Department; Tanzania Investment Centre; and the Tanzania Intelligence & State Security Services Unit and Anti-Terrorism Unit.

Customer Due Diligence

Conduct of a typical KYC identification process

  • Ordinarily, the applicant needs to show an official record reasonably capable of establishing the true identity of the applicant. This official record can be a birth certificate or an affidavit to that effect; a passport or other official means of identification; in the case of a corporation, a copy of the organization’s Memorandum and Articles of Association and a certificate of incorporation together with the latest annual reports certified by the Registrar of Companies; and any other documents as may be prescribed by the Minister in the regulations.
  • Additionally, if a person is acting on behalf of another person, the reporting person shall take reasonable measures to establish the true identity of any person on whose behalf or for whose ultimate benefit the applicant may be acting in the proposed transaction, whether as trustee, nominee, agent or otherwise.
  • The Guidelines for the Verification of Customers’ Identities issued by the FIU further elaborate on due diligence measures.
  • If the client is a natural person, lawyers shall verify the client’s information by:

  1. Comp
aring full names with official documents;
  • Confirming the date of birth and nationality from an official document;
  • Confirming the permanent address using such things as utility bills, bank statements, a letter from a public authority, embassy or consular office, recent lease, or rental agreement;
  • Contacting the customer by telephone, by letter or by email to confirm the information supplied before and after the relationship has been established.
  • If the client is an entity, lawyers shall verify the client’s information by:

    1. a. Reviewing a copy of the latest periodical reports and accounts (for established corporate entities);
      b. Conducting an enquiry confirming submitted documents;
      c. Communicating with registered authorities on the authenticity of registration certificates;
      d. Undertaking an entity search to ensure that the entity has not been, or is not in the process of being, dissolved, struck off, wound up or terminated;
      e. Utilising an independent information verification process, including accessing public and private databases;
      f. Comparing the registered name, registration number and registered address with the most recent official Memorandum and Articles of Association / establishment deeds or constitutional/ governing documents and version of the Certificate of Incorporation/ registration bearing the stamp of the incorporating / registering authority;
      g. Comparing the trade name and business address with information which can be reasonably be expected to achieve such verification like visiting the entity, where practical;
      h. Contacting the entity by telephone, mail, or email;
      i. Comparing the Tax Identification Number with documents issued by the Tanzania Revenue Authority bearing such a number; and
      j. For foreign entities, by comparing the particulars with an official document issued by an authority for recording the incorporation and registration of entities in that country.
      k. Additionally, collecting residential address and contact particulars of the Directors, shareholders who hold 5% of more of the voting rights at a general meeting of the entity concerned and agents of the entity.

    Possibility to meet customer due diligence requirements by relying on third parties who are obliged by law themselves to comply with AML regulations

    Yes, they are permitted, but subject to verification of the information and preparation of the requisite report in accordance with Section 17 of the AMLA 2006.

    Possibility to outsource customer due diligence by contract to other third parties who are not obliged by law to meet AML regulations and rely on these (e.g., WebID, IDnow, PostIdent)

    Outsourcing of third parties to conduct due diligence is not prohibited. However, when a third party conducts due diligence, it is the primary role of the party that requested the information to verify and later on be accountable for the information.

    Presence of a license or registration requirement for the third party in case of outsourcing customer due diligence

    No. There is no such requirement in Tanzania.

    Further questions

    Entities that could be relied on specifically by law as a third party to comply with AML regulations (regardless of outsourcing)

    Yes credit institutions
    Yes financial institutions
    Yes auditors, external accountants, and tax advisors
    notaries and other independent legal professionals
    Yes other trust or company service providers
    Yes estate agents
    Yes other persons trading high-value goods
    Yes providers of gambling services



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