The course of establishing a business relationship
It may be permitted to complete the verification as soon as practically possible
Risks are effectively managed
When it is essential not to interrupt the normal conduct of business
Risk variables
E.g.
Non face-to-face business
The purpose of an account or relationship
Securities transactions which are required to be performed very rapidly
The level of assets to be deposited
The size of transactions undertaken
The regularity or duration of the business relationship
7.4. Customer due diligence measures for legal persons and their arrangements
It should be required to understand the following in relation to customers that are legal persons or legal arrangements, r. 10, in, (c)
The nature of business
Ownership structure
Control structure
There is no need to identify any shareholder or beneficial owner of a company listed on a stock exchange and subject to disclosure requirements
(a) Identify the customer and verify its identity
E.g. a certificate of incorporation, a certificate of good standing, a partnership agreement, a deed of trust
(i) Name, legal form and proof of existence
E.g. memorandum and articles of association of a company
(ii) The powers that regulate and bind the legal person
(iii) The names of senior managers
E.g. directors, trustee(s)
(iv) The address of registered office
If different, a principal place of business
(b) Identify the beneficial owners of the customer and take reasonable measures to verify their identity
(i) For legal persons
If no one is identified, then
There is no need to identify any shareholder or beneficial owner of a company listed on a stock exchange and subject to disclosure requirements
(i.i) Natural persons who ultimately have a controlling ownership interest in the legal person
(i.ii) Natural persons exercising control of the legal person through other means (e.g. owns more than 25% of the company)
(i.iii) The senior managing official
The settlor, the trustee(s), the protector, the beneficiaries and others (persons in similar positions) who have effective control
(ii) For legal arrangements (trusts and other types)
7.5. Actions of financial institutions in case of inability to comply with customer due diligence requirements
If it is not possible for a financial institution to comply with the cdd requirements
A business relation must not be commenced
Transactions must not be performed
An account must not be opened
The existing business relationship must be terminated
Tipping-off: it is prohibited to disclose the fact that an STR or other related information was filed with the FIU, R. 21, (b)
There is a risk of unintentional tipping-off when performing the CDD process
An STR needs to be send to the FIU
The institution may choose not to perform further CDD process and file an STR with data available, R. 10, IN, (A)
Financial institutions and their employees should be protected from any liability when they report their suspicions to the FIU, R. 21, (a)