Monitoring Entity Raises Doubts Over Customer Identification Data
Review of Existing Business Relationships
A monitoring entity has expressed concerns over the veracity or adequacy of previously obtained customer identification data, leading to a review of its existing business relationships.
According to Article 9.15 of the Law, if a monitoring entity is unable to identify and verify the parties involved in transactions, or refuses to submit identification information on customers or beneficial owners, it shall not open new accounts, commence business relations, or perform transactions. The entity must also inform the financial monitoring organ about such cases.
Termination of Business Relationships
Article 9.15 states that if a monitoring entity has doubts about the veracity or adequacy of previously obtained customer identification data, it shall terminate the business relationship and report to the financial monitoring organ.
Review of Existing Relationships
The concerns over customer identification data have led the monitoring entity to review its existing relationships, applying CDD requirements to customers in place since the entry into force of the Law. The entity must conduct due diligence on such existing relationships at appropriate times.
Compliance with AML/CFT Regulations
The move is aimed at ensuring that monitoring entities comply with anti-money laundering and combating the financing of terrorism (AML/CFT) regulations. The law requires monitoring entities to apply customer due diligence (CDD) requirements, including identifying and verifying the identity of customers and beneficial owners.
Verification of Customer Information
In cases where a monitoring entity has doubts about the veracity or adequacy of previously obtained customer identification data, it must take reasonable measures to verify the information. This may involve obtaining additional documentation or conducting further investigations.
Enhanced Due Diligence
The law also requires monitoring entities to perform enhanced due diligence on higher-risk categories of customers, business relationships, or transactions. Enhanced due diligence includes verifying accounts and business relationships through other means, clarifying the purpose and nature of transactions, and obtaining more precise information about customers, beneficial owners, and sources of funds.
Simplified CDD Measures
Monitoring entities must apply CDD requirements to customers existing since the entry into force of the Law, taking into account materiality and risk. The law also allows for simplified CFT measures in certain cases, as specified by legislation.
Strengthening AML/CFT Regulations
The move is aimed at strengthening AML/CFT regulations in the country and preventing the misuse of financial systems for illicit activities.
Key Takeaways
- Monitoring entities must review their existing business relationships to ensure compliance with AML/CFT regulations.
- Entities must verify customer information and take reasonable measures to resolve doubts about previously obtained data.
- Enhanced due diligence is required for higher-risk customers, business relationships, or transactions.
- Simplified CDD measures may be applied in certain cases.