Banks asked to treat proceeds of foreign-run illegal business as money laundering
There is a complete ban on the operation of sole proprietorships to profit foreigners.
Commercial banks operating in Maldives have been mandated to raise money laundering suspicions and inform the central bank if proceeds from business activities run by locally registered sole proprietorships are deposited in the accounts of foreigners and they are in turn remitted abroad.
The regulation, which was designed to prevent businesses that directly or indirectly benefit a foreigner despite being locally-owned, came into effect on Monday.
While there is a complete ban on the operation of sole proprietorships to profit foreigners, the registrar is empowered to declare it. The regulations also state the responsibility of banks and remittance agencies in monitoring the situation.
In any case where a migrant is willing to deposit money in his bank account and move the money abroad, transactions that do not match the amount declared as their income should be stopped
If such transactions are suspected to be proceeds of a locally-registered sole proprietorship, it is the responsibility of banks and remittance service providers to inform MMA’s financial intelligence unit under the Prevention of Money Laundering and Terror Financing Act
If there is evidence that money is being deposited in the bank account of a foreign national in connection with a sole proprietorship's transactions, the action that the registrar can take include:
Reporting to the concerned authority to take action
Levying a penalty of MVR 100,000 on the sole proprietorship owner
To declare the sole proprietorship not eligible for re-registration for the next five years
Cancellation of business registration