Both Ends of the Same Transaction: Timing of Verification Requirements

Introduction

A recent report has highlighted the significance of timing in verification requirements for financial transactions. The report, which focuses on deposit-taking institutions, emphasizes that the timing of verification is crucial in preventing money laundering and ensuring that financial transactions are legitimate.

Timing of Verification

According to the report, deposit-taking institutions can start processing business or applications for account opening immediately, as long as they take prompt steps to verify the customer’s identity and do not transfer or pay any money until the verification requirements have been satisfied. However, the report also warns that failure to provide satisfactory evidence of identity without adequate explanation may lead to suspicion of money laundering.

Procedures for Establishing Satisfactory Evidence of Identity

The report outlines several procedures for establishing satisfactory evidence of identity, including:

• Verifying the name and address of all account holders
• Obtaining a date of birth
• Examining documentary evidence such as:
  • Passports
  • Driver’s licenses
  • Government-issued identity cards
• Comparing documents with the applicant’s appearance to guard against fraud

Handling Situations Where Satisfactory Evidence of Identity Cannot Be Obtained

The report emphasizes the need for deposit-taking institutions to establish clear and consistent policies for dealing with situations where satisfactory evidence of identity cannot be obtained. This may include:

• Requesting additional documentation
• Conducting further searches and enquiries

Verifying the Identity of Minors, Students, the Elderly, and Disabled People

The report acknowledges that there may be circumstances when these individuals are unable to provide full documentary evidence. It provides guidance on verifying their identity, taking into account their specific needs.

Conclusion

Overall, the report stresses the importance of timing in verification requirements and emphasizes the need for deposit-taking institutions to have robust procedures in place to prevent money laundering and ensure the integrity of financial transactions. By understanding the importance of timing and implementing effective verification procedures, these institutions can help maintain trust in the financial system.