Belgian Diamond Traders: Don’t Neglect Client Identification
Introduction
As a diamond trader in Belgium, it’s essential to understand that verifying an EU VAT number is not enough to identify and verify clients. The law requires more.
According to the Belgian authorities, diamond traders must identify their clients and verify their identity using specific documents outlined in the law. This includes requesting a copy of a client’s ID card, which may seem invasive but is a necessary step to combat money laundering and terrorist financing.
Requesting Client Documents
The General Data Protection Regulation (GDPR) and Anti-Money Laundering (AML) legislation may seem like separate entities, but they intersect when it comes to processing personal data. Diamond traders are allowed to request client documents, including copies of ID cards, to fulfill their AML obligations.
What is Allowed?
- Request a copy of a client’s ID card
- Verify the client’s identity using specific documents outlined in the law
What if a Client Refuses?
If a foreign client refuses to provide a copy of their ID card, citing legal exceptions, the trader must consider this a high-risk situation and document the reasons for accepting the client despite the lack of documentation.
What If You Don’t Receive All Documents?
In case a client fails to provide all required documents or refuses to cooperate, diamond traders must send a friendly reminder requesting the necessary information. Failure to comply can result in a high-risk assessment, which may lead to refusal of business or notification to the Financial Intelligence Unit (CFI) or SPOC of AWDC.
Steps to Take
- Send a friendly reminder requesting the necessary information
- Document the reasons for accepting the client despite the lack of documentation
- Consider this a high-risk situation and take necessary measures to mitigate it
Identifying Suppliers
While AML legislation only requires client identification, increased risk assessments may warrant supplier identification as well. Diamond traders should assess their suppliers’ representatives and ultimate beneficiaries for potential risks and take necessary measures to mitigate them.
Why is Supplier Identification Important?
- To identify potential risks associated with suppliers
- To take necessary measures to mitigate those risks
Conclusion
Belgian diamond traders must prioritize client identification and verification to comply with AML legislation and prevent money laundering and terrorist financing. By understanding the intricacies of GDPR and AML, diamond traders can ensure a safe and secure business environment.
Takeaway
Prioritize client identification and verification to avoid non-compliance and potential risks associated with money laundering and terrorist financing.