Recent anti-money laundering regulations have resulted in enhanced and more effective controls by banking institutions, with newlyweds and children not exempt from scrutiny as banks require proof for deposits from wedding and christening gifts, particularly for large amounts.
Following complaints about “exhaustive” controls from newlyweds and new parents attempting to deposit wedding or christening “gifts” into bank accounts, philenews contacted banking sources to understand how financial institutions handle such cases.
Depositing significant amounts from weddings or christening must be accompanied by evidence such as wedding invitations, as banks require initial explanation of the money’s source.
The process varies case by case, with amount size, deposit timing and individuals’ creditworthiness serving as key assessment parameters.
Time limits for deposits
Banks provide a small time “window” for deposits. If a couple attempts to deposit wedding money several months later, this may raise suspicions, and without adequate explanations, banks may refuse the deposit.
Should couples wish to deposit additional amounts as wedding “proceeds,” this must occur within certain days of the initial deposit. Otherwise, interested parties must again justify the money’s source.
Central Bank issues new directive
In a related development concerning new control regulations, the Central Bank of Cyprus issued a directive in early May, effective June 2, seeking to simplify procedures and facilitate citizens and businesses despite the enhanced compliance framework now governing the banking system.
The new directive stipulates that banks and other obliged entities must implement policies avoiding unjustified denial or delay of legitimate access to financial services, at least for citizens they assess as having low probability of involvement in money laundering activities.
For example, banks can categorise retired citizens with no income beyond pensions as low-risk, with required documentation proportionate to this low risk.
Specific directive provisions
Based on assessed risk for each client, the directive:
- Allows business relationship updates at frequencies proportional to each client’s risk without setting minimum update frequency for low money-laundering risk clients
- Permits identity document copies (instead of originals) during updates, making procedures faster and easier
- Allows use of information acquired during business relationships, reducing required information from citizens when updating details
- Enables alternative evidence for citizens unable to comply due to health issues or physical disability, showing necessary sensitivity towards those facing such problems
- Provides flexibility regarding residence address evidence, such as certification through government documents or electronic utility bills
- Permits document certification by third parties (such as state services) and electronic document use, expanding certification options for better customer service
The Central Bank emphasises that simplification efforts do not translate to regulatory framework relaxation. Strict requirements of the country’s regulatory framework remain maintained.
