CUSTOMER IDENTIFICATION

PRESENTED BY: SAJJAD HAMIDI

5. Customer Identification (Key Issues for Supervisors)

National supervisors should develop:
customer

identification program guidelines and best practices reflecting the various types of transactions that are most prevalent in the national banking system.

5. Customer Identification (Process of Customer Identification)

i. ii. iii.

Collecting the identification information Screening the customer Assessing the customers risk profile Reconfirming the identification information Obtaining additional information Reconfirming the identification information

(if general due diligence is believed to be enough)

(if enhanced due diligence is believed to be required)

iv. v.

5. Customer Identification (Natural Persons)

Identification Information

Legal name and any other names used (such as maiden name) Correct permanent address (the full address should be obtained: a Post Office box number is not sufficient) Telephone number, fax number, and e-mail address Date and place of birth Nationality Occupation, public position held and/or name of employer An official personal identification number or other unique identifier contained in an unexpired official documents that bears a photograph of the customer Type of account and nature of the banking relationship Signature
(source: General Guide to Account Opening and Customer Identification, BCBS)

5. Customer Identification (Natural Persons) Screening customers

new

customer applications existing customer base against lists of known or suspected money launderers/terrorists

5. Customer Identification (Natural Persons)

Obtaining Additional Identification Documents

If the financial institution believes that enhanced due diligence is required after the initial assessment of the customers risk profile, it should obtain additional information, such as:

Evidence of an individuals permanent address sought through a credit reference agency search or through independent verification by home visits Personal reference (i.e. by an existing customer of the same institution) Prior bank reference and contact with the bank regarding the customer Source of wealth Verification of employment, public position held (where appropriate)

5. Customer Identification (Natural Persons)

Reconfirming the Identification

Confirming the date of birth from an official document (birth certificate, passport, identity card, social security records) Confirming the permanent address

Utility bill, tax assessment, bank statement, a letter from a public authority

Contacting the customer by telephone or by letter to confirm the information supplied after an account has been opened

A disconnected phone or returned mail should warrant further investigation

Confirming the validity of the official documentation provided through certification by an authorized person

Embassy official, notary public

5. Customer Identification (Legal Persons/Arrangements)

Legal Elements of the Customer Identification
1.

Verify that any person acting on behalf of the legal person/arrangement is so authorized. Identify any person acting on behalf of the legal persons/arrangements.

2.

Verification of the identity of directors/signatories

Directors: A directors exercises control over the business and thus over funds passing through the account Signatories: A signatory to an account is able to exercise control or authority over funds passing through the account

5. Customer Identification (Legal Persons or Arrangements)

Legal Elements of the Customer Identification
3.

Identify the legal person/arrangement

Verification of the lawful existence of the company Verification of the license if it is required in operating such business

Is the legal person/arrangement regulated? Is the legal person/arrangement required to observe AML/CFT controls?

Verification of the type of legal form and business purposes

5. Customer Identification (Legal Persons/Arrangements)

Business Elements of the Customer Identification
1. 2. 3. 4. 5.

Annual audited accounts, copies of business plan. Location of the headquarter, branches, plants, warehouses, overseas offices. Major customers/suppliers. Other financial institutions the legal person/arrangement has business relationships. Likely level of account activity and format (cash, checks, wires)
It is important to obtain sufficient documentation to prove or establish that the business exist.

5. Customer Identification (Legal Persons/Arrangements)

Ownership/Identification
Mr. T Ms. U

Company E

Company D

Mr. V

Mr. W

Bearer Shares

Mr. S

Company C

Company B

Mr. X

Mr. Y

Ms. Z

Company F

Company A

Company A requested a new account. Which entities should be identified?

Thank You