Verification of Client’s Customer Identity: A Must for Business Success
In today’s fast-paced business world, verifying the identity of customers is a crucial step in preventing money laundering and financing of terrorism. As per Barbados’ regulations, financial institutions are required to conduct due diligence on their clients’ customers to ensure compliance with anti-money laundering (AML) and know-your-customer (KYC) requirements.
What is Due Diligence?
Due diligence refers to the measures taken by a client to mitigate risk before entering into an agreement or carrying out a financial transaction with another party. In the context of verifying customer identity, due diligence involves checking the authenticity of identification documents and ensuring that they meet specific requirements.
Types of Identity Documents Accepted in Barbados
In Barbados, the following types of identification documents are accepted for verification purposes:
- Government-issued documents containing the customer’s name and address
- Bank statements not older than three months containing the customer’s name and address
- Department-issued documents containing the customer’s name and address
Timing of Verification
Identity verification is a continuous process that must be conducted in multiple instances. Clients are required to verify their customers’ identities when onboarding new clients, as well as at regular intervals throughout the business relationship.
Enhanced Due Diligence for High-Risk Customers
For high-risk customers, enhanced due diligence measures may be necessary to prevent money laundering and financing of terrorism. Shufti Pro’s AML Screening service screens an individual’s selected ID attributes against watchlists of global regulatory authorities, foreign and domestic databases, compromised PEPs, and sanctioned individuals.
Reliance on External Services
In some cases, clients may choose to seek the services of a third-party provider for fulfilling AML/KYC obligations. However, it is essential to note that the client will remain liable for maintaining regulatory compliance and fulfilling AML and KYC obligations.
Record Retention Requirements
As per Barbados’ regulations, data must be retained for not less than five years as part of AML and KYC obligations for due diligence purposes. Clients are responsible for collecting all necessary information (Due Diligence Data) from third-party providers without undue delay.
Conclusion
Verifying the identity of customers is a critical step in preventing money laundering and financing of terrorism. By understanding the requirements for due diligence and identity verification in Barbados, businesses can ensure compliance with AML and KYC regulations and maintain a safe and secure financial environment.