Customer Identification 1 What is Customer Identification CDD

Customer Identification

1. What is Customer Identification? CDD Pyramid 2

2. What is Customer Identification • To identify customer and verify customer’s identity using reliable, independent source documents (identification data)(Rec 10) • One of the process of CDD • National supervisors should develop: Ø customer identification program Ø guidelines and best practices reflecting the various types of transactions that are most prevalent in the financial system. 3

3. Identification obligations by R 10 • Recommendation 10 – Who must be identified and verified? Ø Customer (natural person, legal person or arrangements) Ø Beneficial owner: natural person who ultimately owns or controls a customer; – When: Ø Ø At establishing business relationship When conducting occasional transactions If there is suspicion of ML/TF regardless of amount If there are doubts as to the veracity of previously obtained information – How: Using independent source documents and data 4

4. Procedures of Customer Identification • Key points in customer identification Ø Form a “Reasonable Belief” of True Identity. Ø Specify the Minimal Identifying Information Required. Ø Risk-based Approach. Ø Written and Board Approved 5

4. Procedures of Customer Identification 1) identification procedures • Required Identification Information: Natural person Legal persons & arrangements - Name - date of birth - residence address - National/Tax Identification Number, if applicable - Name, legal form and proof of existence - names of a senior management position (e. g. senior managing directors in a company, trustee(s) of a trust). - address of the registered office, and, if different, a principal place of business. 6

4. Procedures of Customer Identification • Required Identification Information foreign persons: - A taxpayer identification number, if applicable - Passport number and country of issuance - Number and country of issuance of any government issued document evidencing nationality or residence and bearing a photograph or similar safeguard 7

4. Procedures of Customer Identification 2) Verification Procedures • Verification Through Documents Ø For individuals: - Unexpired government ID with picture - Driver’s license - Passport Ø For legal persons and arrangements: – Documents showing the entity’s existence – Registered articles of incorporation – Government-issued business licenses 8

4. Procedures of Customer Identification • Non-documentary Verification Methods Ø Ø Contacting the customer Verifying information through third-party sources Checking references from other institutions Obtaining financial statements 9

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