REPORTING OBLIGATION UNDER THE ANTI MONEY LAUNDERING AND ANTI TERRORISM FINANCING ACT, 2001. DUTY OF BANK SECRECY.

Abstract

This is a conceptual paper containing introduction, main body, conclusion and references. The paper is
mainly doctrinal, relying mainly on statutory provisions under Anti Money Laundering and Anti Terrorism Financing Act,
2001 (AMLATFA, 2001. The paper examined the significance of provisions related to reporting obligation (on financial
institutions, emphasis on banks) in the fight against money laundering and terrorist financing. It was revealed that
reporting obligation may contribute immensely in countering money laundering and terrorist financing, even though it
appears to be in conflict with the duty of banking secrecy. Thus, reporting obligation on financial institutions clearly
breached the duty of banking secrecy (which is the basis of banker-customer relationship). However, the breach of duty of
secrecy may be justified considering the widespread effect of money laundering and terrorist financing; which have become
a global problem. It is argued that, the fight against money laundering and terrorist financing would hardly succeed
without disclosing certain information by financial institutions. There is need to enforce strict penalty for any financial
institution that negligently disclosed customer’s information to any person apart from the legally recognized person.