Customer Verification and Due Diligence under The Anti-Money Laundering Act

The Anti-Money Laundering Act [CAP. 423 R.E 2019] outlines specific requirements for reporting persons to verify customer identities and conduct due diligence. Here are the key points:

Identity Verification Requirements

Reporting persons must take reasonable measures to verify a customer’s identity by requiring them to produce an official record, such as:

• Birth certificate
• Passport
• Business registration documents (for corporate entities)
• Memorandum and Articles of Association (for corporate entities)

Verification for Continuing Business Relationships or New Transactions

When establishing a continuing business relationship or a new transaction, the reporting person must determine if the applicant is acting on behalf of another person. If so, they must verify the identity of that person.

Steps to Verify Identity in Such Cases

• Take reasonable measures to establish the true identity of the person being acted upon.
• Consider factors like the applicant’s country of origin, industry practices, and local regulations related to money laundering and terrorist financing when determining “reasonable measures.”

Exceptions to Identity Verification Requirements

Reporting persons are exempt from requiring evidence of identity in certain situations:

• When the applicant is also a reporting person.
• When a customer has already provided satisfactory identification.

These provisions aim to prevent money laundering and terrorist financing by ensuring that reporting persons verify their customers’ identities and maintain accurate records.