Some of the salient features of the Act, as can be read in the Consultative Paper prepared for this workshop are:   provisions to strengthen the legal basis, ownership and structure of Bank of Zambia as a modern central bank, as well as its primary objective;    provisions relating to adequate power and independence;    provisions relating to all aspects of the relationship between the Bank and Government structures;    institutional arrangements of the Bank including the appointment of governors, directors and auditors, internal budgets, reporting requirements, preservation of confidentiality and handling of possible offences;    adequate mechanisms for good governance and security of tenure for Governors;    measures to better manage and application of monetary policies, including the role of lender-of-last-resort, interest rate policies, exchange rate policies and Bank of Zambia’s involvement in money and foreign exchange markets;    creation of a Monetary Policy Committee; and    accountability to Government, Parliament and the Public. By tabling this draft Act before you the Stakeholders, the Bank of Zambia wants to maximise its consultative process by taking into account your views on this layman’s draft. We encourage constructive debate and assure you that your views will be taken into account before the draft is transmitted to our parent ministry, the Ministry of Finance and National Planning. The Ministry is responsible for initiating the legislative process that shall see this layman’s draft transformed into a Bill and tabled before Parliament for debate.
While it is permissible for AIs to rely on intermediaries to carry out checks on the identity of potential customers and the source of their funds, the ultimate responsibility still rests with AIs to know their customers and their customers’ business. Intermediaries should therefore only be used if the AI is satisfied that they apply due diligence standards and procedures as rigorous as those of the AI itself and are “fit and proper”. It helps in this respect if the intermediary is itself regulated or is the member of a reputable professional body. The AI should monitor the track record of the intermediary and the performance of the accounts that it introduces. All relevant identification data used by the intermediary to verify the customer’s identity should be submitted for review by the AI. This latter requirement is not currently mandated for all intermediaries in our current guideline; and we will need to consider whether this exception is still appropriate. A further issue relates to the treatment of client accounts opened by solicitors or accountants. At present, we allow such intermediaries to rely on professional secrecy codes as a reason for not disclosing the identity of the underlying principals. Non-disclosure may be acceptable in the case of pooled accounts where the funds held by the intermediary are co-mingled at the bank. But where the account is opened on behalf of a single client, the justification is much less clear. Again, this is an area where change may be required.