Financial Institutions Must Verify Clients with Multiple Documents to Ensure Compliance with Anti-Money Laundering Regulations

Identification and Verification of Clients Critical in Preventing Financial Crimes

In a move to enhance financial security measures, financial institutions are now required to verify clients using multiple documents to prevent money laundering and terrorist financing. This new requirement is aimed at ensuring that financial transactions are transparent and compliant with anti-money laundering (AML) regulations.

The Verification Process

According to the latest guidelines, financial institutions must:

• Identify and verify the client’s identity, including determining whether they are a politically exposed person.
• Confirm established identification data using various documents such as:
  • Identity cards
  • Driver’s licenses
  • Passports
  • Other reliable sources

Ongoing Monitoring of Clients

To ensure ongoing monitoring of clients, financial institutions must:

• Assess business relationships and gather information on their purpose and intended use.
• Analyze transactions carried out within the framework of the business relationship to ensure they are consistent with the client’s profile and the money laundering and terrorist financing risks associated with that client.

Additional Measures

Financial institutions must also:

• Investigate the source of assets at the disposal of the client in cases justified by the circumstances.
• Keep documents, data, or information in their possession regarding business relations up-to-date to prevent any irregularities.

Practical Application

The practical application of these measures is carried out based on the principles established in AML records, including:

• Charters
• Forms
• Notes introduced by financial institutions
• Any person acting for a financial institution in fulfilling its AML/ CFT obligations must use these forms when dealing with clients.

Client Identification

To identify a client, financial institutions must gather the following information:

• Name
• Citizenship
• Personal identification number or tax identification number
• Date of birth
• Address of residence

For legal entities or organizational units without legal personality, they must gather information on:

• Company name
• Organizational form
• Registered office or business address
• TIN
• Identification data referred to in letters a-no. i and iii of the person representing that entity.

Politically Exposed Persons

Financial institutions must determine whether a client is a politically exposed person by making them declare their status before using a service. The declaration must include a clause stating that they are aware of the criminal liability for making a false declaration.

Evaluation and Monitoring

The evaluation of economic relations and ongoing monitoring consists of taking actions leading to an assessment of whether transactions carried out by a person or entity do not show the characteristic of permanence, violate regulations related to anti-money laundering, or come from undisclosed or illegal sources. Financial institutions must also update identification data and verification documents held on an ongoing basis.

Conclusion

In conclusion, financial institutions must verify clients using multiple documents to ensure compliance with AML regulations. This includes identifying and verifying client information, assessing business relationships, and monitoring transactions to prevent money laundering and terrorist financing.