identification and namecheck : clarification - by cdds

IDENTIFICATION AND NAMECHECK

The basics of KYC! And the first step towards being compliant.…



The first step in this process is the customer identification and the screening of the namesagainst the different sanctions and PEP (Politically Exposed Persons) lists.

Are considered clients

• your direct customers - individuals, corporate clients (legal persons/legal entities)

• Ultimate/economic beneficiaries and other stakeholders of your corporate clients

• those who carry out, on an occasional basis, a transaction of 15,000 euros or more, either ina single operation or in several operations that appear to be linked

You as professionals are obliged to apply due diligence with respect of your clients. This is called the Customer Due Diligence (CDD) or Know-Your-Customer (KYC) Process!

What does the identification process entail?

verification of the client’s identity on the basis of official documents; data or informationobtained from a reliable and independent source

identification, where applicable, of the beneficial owner(s) and taking adequate measures toverify their identity

Note: The beneficial owner of a legal person/legal entity is always a natural person. Althoughthe principle of identifying beneficial owners is applicable to both natural persons andcorporations/legal persons, it is necessary to define the natural persons behind thesecorporations/legal persons.

Identification of the structure of legal entities, to ensure that all parties are defined

Note: Generally, the verification of the identity of the customer and the beneficial owner(s) must be conducted before the beginning of a business relationship or before a transaction takes place.


Official documents include:

Individuals:

A copy of an official identification document, for example a passport, identity card or residence permit (signature and photo required on the document).

Legal persons/legal entities:

Articles of Association (or equivalent), extract of the Commercial Register (or equivalent), business authorisation (i.e. if the entity manages third party funds), accounts and annual reports, appointment of company directors, etc

Trust deed (i.e. trust), document of establishment (i.e. foundation) Identification of the beneficial owners and of the persons with authorised signatures

Note: Only certified documents are accepted in your KYC file (certified by yourselves in case of face-to-face business; otherwise by an authorised person or public authority). Documents need to be reliable and may be provided by the customer but not produced by him (“independent source”).



As required by Law and recommended by the Financial Action Task Force (FATF), you arerequired to verify whether your clients are officially short-listed as either criminals or PEPs(Politically Exposed Persons).

PEPs are considered as High Risk counterparties which require additional AML/CTFpreventive measures (see FATF Recommendations 12 and 22) in order to detect potentialabuse if and when it occurs.

Note: A PEP is defined by the FATF as an individual who is or has been entrusted with aprominent public function by a government or an international organisation. Dueto their influence, PEPs may abuse of their positions in order to commit moneylaundering offenses or related offenses such as corruption and bribery.

Are also considered as PEPs, their close entourage, such as their family membersrelated either directly or through marriage, as well as their close associates whoare connected to them either socially or professionally.

Criminals should be avoided in your client base.

Why do you need to conduct a NameCheck?


Your prospects and clients need to be checked against official sanctions lists, such as those issued by:

• European Union• United Nations• HM Treasury (UK)• OFAC (USA)• SECO (Switzerland)• ...

And any other list as may be issued from time-to-time by the organisations as mentioned above.

Note: These lists are considered as having a legal basis in terms of AML/CTF obligations.

PEPs list (as made available by competent AML/CTF solutions providers)

What are the lists you must consider?


Under the current AML/CTF obligations, you are required to

check whether your customers are listed on official sanctions lists or as PEPs and take appropriate action whenever required

identify your customers as well as any ultimate beneficiaries of your customers that are legal entities, on the basis of official documents and maintain such documents in your KYC file

What you need is a powerful automated global system that will manage your name screening for you and keep track of your customer identification documents!

We have the solution…

Conclusion

CDDS MAKES YOU COMPLIANT WITH YOUR AML/CTFOBLIGATIONS

AMLspotter, an all-in-one solution thatprovides you:

AML risk management

Dynamic KYC / KYT

AML Risk Classification

Manual & Automated name screening

Recurrent monitoring

AML risk dashboard

Detailed reporting

identification and namecheck : clarification - by cdds

Economy & Finance