The basics of KYC! And the first step towards being compliant.…

2. IDENTIFICATION AND NAMECHECK
The basics of KYC! And the first step towards being compliant.…
IDENTIFICATION AND NAMECHECK

3. IDENTIFICATION AND NAMECHECK
The first step in this process is the customer identification and the screening of the names
against the different sanctions and PEP (Politically Exposed Persons) lists.
Are considered clients
• your direct customers - individuals, corporate clients (legal persons/legal entities)
• Ultimate/economic beneficiaries and other stakeholders of your corporate clients
• those who carry out, on an occasional basis, a transaction of 15,000 euros or more, either in
a single operation or in several operations that appear to be linked
You as professionals are obliged to apply due diligence with respect of your
clients. This is called the Customer Due Diligence (CDD) or Know-Your-Customer
(KYC) Process!

4. What does the identification process entail?
 verification of the client’s identity on the basis of official documents; data or information
obtained from a reliable and independent source
 identification, where applicable, of the beneficial owner(s) and taking adequate measures to
verify their identity
Note: The beneficial owner of a legal person/legal entity is always a natural person. Although
the principle of identifying beneficial owners is applicable to both natural persons and
corporations/legal persons, it is necessary to define the natural persons behind these
corporations/legal persons.
 Identification of the structure of legal entities, to ensure that all parties are defined
Note: Generally, the verification of the identity of the customer and the beneficial owner(s)
must be conducted before the beginning of a business relationship or before a
transaction takes place.
IDENTIFICATION AND NAMECHECK

5. Official documents include:
Individuals:
 A copy of an official identification document, for example a passport, identity card or residence
permit (signature and photo required on the document).
Legal persons/legal entities:
 Articles of Association (or equivalent), extract of the Commercial Register (or equivalent),
business authorisation (i.e. if the entity manages third party funds), accounts and annual reports,
appointment of company directors, etc
 Trust deed (i.e. trust), document of establishment (i.e. foundation)
 Identification of the beneficial owners and of the persons with authorised signatures
Note: Only certified documents are accepted in your KYC file (certified by yourselves in case of face-
to-face business; otherwise by an authorised person or public authority). Documents need to
be reliable and may be provided by the customer but not produced by him (“independent
source”).
IDENTIFICATION AND NAMECHECK

6. IDENTIFICATION AND NAMECHECK
As required by Law and recommended by the Financial Action Task Force (FATF), you are
required to verify whether your clients are officially short-listed as either criminals or PEPs
(Politically Exposed Persons).
 PEPs are considered as High Risk counterparties which require additional AML/CTF
preventive measures (see FATF Recommendations 12 and 22) in order to detect potential
abuse if and when it occurs.
Note: A PEP is defined by the FATF as an individual who is or has been entrusted with a
prominent public function by a government or an international organisation. Due
to their influence, PEPs may abuse of their positions in order to commit money
laundering offenses or related offenses such as corruption and bribery.
Are also considered as PEPs, their close entourage, such as their family members
related either directly or through marriage, as well as their close associates who
are connected to them either socially or professionally.
 Criminals should be avoided in your client base.
Why do you need to conduct a NameCheck?

7. IDENTIFICATION AND NAMECHECK
 Your prospects and clients need to be checked against official sanctions lists, such as those
issued by:
• European Union
• United Nations
• HM Treasury (UK)
• OFAC (USA)
• SECO (Switzerland)
• ...
And any other list as may be issued from time-to-time by the organisations as mentioned above.
Note: These lists are considered as having a legal basis in terms of AML/CTF obligations.
 PEPs list (as made available by competent AML/CTF solutions providers)
What are the lists you must consider?

8. IDENTIFICATION AND NAMECHECK
Under the current AML/CTF obligations, you are required to
 check whether your customers are listed on official sanctions lists or as PEPs and take
appropriate action whenever required
 identify your customers as well as any ultimate beneficiaries of your customers that are legal
entities, on the basis of official documents and maintain such documents in your KYC file
What you need is a powerful automated global system that will manage your
name screening for you and keep track of your customer identification
documents!
We have the solution…
Conclusion

9. CDDS MAKES YOU COMPLIANT WITH YOUR AML/CTF
OBLIGATIONS
AMLspotter, an all-in-one solution that
provides you:
 AML risk management
 Dynamic KYC / KYT
 AML Risk Classification
 Manual & Automated name screening
 Recurrent monitoring
 AML risk dashboard
 Detailed reporting