Financial firms will now be able to ask corporate customers for necessary documents during corporate customer verification to determine whether a corporation's owners or controllers fall under "terror-related persons," who are subject to restrictions on financial transactions and other activities.
The Financial Intelligence Unit (FIU) of the Financial Services Commission said on the 14th that "as the amended Terrorist Financing Prohibition Act takes effect on the 22nd of this month, certain verification procedures for corporate customers will be added."
The financial authorities amended the Terrorist Financing Prohibition Act on Jan. 21 last year to enhance the effectiveness of preventing terrorist financing. The financial authorities aligned the Enforcement Decree and subordinate regulations of the Terrorist Financing Prohibition Act to take effect on the 22nd, when the amended law comes into force.
The amended Terrorist Financing Prohibition Act allows the Financial Services Commission (FSC) to designate corporations directly or indirectly owned or controlled by terror-related persons as subjects to restrictions on financial transactions and other activities. Even if a corporation is not designated, if it is directly or indirectly owned or controlled by a terror-related person, financial transactions and the disposal of property rights will be restricted.
At a meeting of the related-agency council held in December last year, the Financial Intelligence Unit urged advance notice and sufficient explanations to prevent excessive inconvenience from arising due to the additional verification procedures.