Verification of online customers: Is your business complying with the new AML/KYC laws?
By Bianca Venten
4 December 2020
The Anti-Money Laundering (AML) and Know Your Customer (KYC) laws were amended globally in 2019. You can no longer simply copy and paste your 2018-2019 strategy and apply it to 2020, as you may have done in previous years.
The changes apply to any business receiving funds from customers that are not already known to them. This includes customers of online services and applications. Essentially, steps must be taken to verify any new customers. The requirements apply to both one-off transactions and ongoing business relationships.
The identity information to be collected under the new regime is different if the customer is an individual compared to if the customer is an entity. Individuals must provide, at a minimum, their full name, residential address and date of birth. This must all be proven with an IP card, passport or driver’s licence. Customers needs to take a photo to verify their photo on their ID document (and there are further rules surrounding how the photo is to be taken, the quality, and the procedure for uploading a photo).
A company search must be conducted to verify any customers that are entities, to confirm the company/business is registered. There are also certain requirements around verifying the identity of the beneficial owners of the company/business.
Businesses need to be satisfied that the customer is either the individual that they claim to be, or if not an individual, it is a real entity of which the beneficial owners have been adequately verified.
Businesses must ensure that they are complying with the new regime and are able to prove record of the steps that were undertaken to identify the customer, in the event of being audited.