Financial Crime World

Timing of Verification Requirements Crucial in Fight Against Money Laundering

The fight against money laundering requires timely and effective verification requirements to prevent illegal activities. A recent report highlights the importance of verifying customer identity promptly, emphasizing that deposit-taking institutions must establish clear policies for dealing with situations where satisfactory evidence of identity cannot be obtained.

Establish Clear Policies and Procedures

Deposit-taking institutions can begin processing business or account opening applications immediately, provided they take prompt steps to verify the customer’s identity. The report stresses that institutions should not transfer or pay out any funds until verification requirements are satisfied.

Verification Requirements

The guidelines outline various procedures for establishing satisfactory evidence of identity, including:

  • Verifying the identity of individuals and entities
  • Checking documents provided by customers
  • Verifying date of birth (a valuable identifier in law enforcement investigations)

Institutions should also obtain documentary evidence from reputable sources, such as:

  • Passports
  • Driver’s licenses
  • Government-issued ID cards

Other Searches and Enquiries

To establish a customer’s current permanent address, institutions can conduct the following searches and enquiries:

  • Reviewing the Register of Electors
  • Making credit reference agency searches
  • Requesting recent utility bills or tax bills
  • Checking local telephone directories

However, institutions should not rely solely on introductions from respected customers or trusted staff members to verify identity.

Special Considerations for Minors, Students, the Elderly, and Disabled People

The report acknowledges that there may be circumstances where certain individuals cannot provide full documentary evidence of identity. In these cases, institutions should establish alternative verification procedures to ensure compliance with anti-money laundering regulations.

Conclusion

The guidelines emphasize the importance of timely and effective verification procedures in preventing money laundering and protecting financial institutions from illegal activities. By following these recommendations, institutions can help prevent illicit activities and maintain a secure and trustworthy environment for customers.