Financial Crime World

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Customer Due Diligence Measures Critical in Preventing Financial Crime

The Central Bank of Bahrain has emphasized the importance of customer due diligence measures to prevent financial crime and ensure a safe and secure financial system.

Compliance Requirements

According to the bank’s Rulebook, specialized licensees must obtain and record certain information from customers before providing financial services. This includes:

  • Full legal name
  • Permanent address
  • Date and place of birth
  • Nationality
  • Passport number or CPR/residence permit number
  • Telephone/fax number and email address
  • Occupation
  • Employer’s name and address
  • Type of account
  • Source of funds

Verification Methods

The bank has specified the methods for verifying this information, including:

  • Confirming date of birth and legal name by taking a copy of an official identification document (e.g. passport or CPR)
  • Confirming permanent residential address by taking a copy of a recent utility bill or similar statement from another financial institution
  • Verifying identity through direct contact with customers (in person, phone, letter, or email)

Certification and Verification

Licensees must also verify the identity of individuals providing certification for customer identification documents. This includes:

  • Checking membership of a professional organization (e.g. lawyer or accountant)
  • Verifying against databases or websites
  • Ensuring that any copied documents are originals, certified by an authorized official of the licensee

Consequences of Non-Compliance

If a licensee is unable to comply with these requirements due to incomplete information, it must consider:

  • Terminating the relationship
  • Not proceeding with the transaction
  • Filing a suspicious transaction report (in some cases)

Conclusion

The Central Bank of Bahrain has stressed that customer due diligence is critical in preventing financial crime and ensuring a safe and secure financial system. Specialized licensees must adhere to these requirements to maintain their licenses and protect their customers’ funds.