In the UK, there are no minimum transaction thresholds, under which customer due diligence (also known as KYC – Know your Customer) may be disregarded.
Gurkha Gold applies appropriate measures to implement relevant rules on Customer Due Diligence.
Customer due diligence means taking steps to identify your customers and checking they are who they say they are. In practice this means obtaining a customer’s name, photograph on an official document which confirms their identity and residential address or date of birth.
High level requirements for verification
For Individuals:
Full name, residential address and date of birth preferably from a government issued document which includes the customer's full name and photo, and either residential address or date of birth e.g. valid passport, valid photo card driving licence etc; or
A government issued document(without a photograph) which includes the customer's full name, supported by a second document, either government issued, or issued by a judicial authority, a public sector body or authority, a regulated utility company,or another FCA-regulated firm in the UK financial services sector or in an equivalent jurisdiction, which includes the customer's full name and either residential address or date of birth.
For private / unlisted companies:
Names of all directors (or equivalent), names of individuals who own or control over 25% of its shares or voting rights and names of any individual(s) who otherwise exercise control over the management of the company.
Following a risk assessment, it may be necessary to further verify one or more of the directors as appropriate in line with Customer Due Diligence requirements for individuals.
With regard to “beneficial owners”, risk based and adequate measures must be applied to verify the identity of the beneficial owner(s).
Copy identification documents
Where identity is verified electronically,or copy documents are used, an additional verification check to manage the risk of impersonation fraud needs to be applied. This may require copy documents to be certified by an appropriate person.
High level requirements concerning beneficial ownership (identification and verification)
“Beneficial owners” are defined as individuals either owning or controlling more than 25% of body corporates or partnerships(or at least 25% of trusts) or otherwise owning or controlling the customer entity.
The Guidance from the Joint Money Laundering Steering Group (JMLSG) states that all individual beneficial owners owning or controlling more than 25% of the company’s shares or voting rights(even where these interests are held indirectly) or who otherwise exercise control over the management of the company, must be known. There must be risk based and adequate measures to verify the identity of those individuals.
The JMLSG is made up of the leading UK Trade Associations in the Financial Services Industry. Its aim is to promulgate good practice in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations.
Enhanced Customer Due Diligence
Certain situations which could present a higher risk of money laundering or terrorist financing, must be subject to enhanced customer due diligence on a risk-sensitive basis and have enhanced ongoing monitoring.
These situations are:
In respect of identification purposes, the customer has not been physically present;
In respect of a correspondent banking relationship with Respondents from non- European Economic Area ('EEA')states; or
In respect of a business relationship or an occasional transaction with a Politically Exposed Person(PEP).
Additional Due Diligence required for Politically Exposed Persons (‘PEPs’)
When a proposal arises to establish a business relationship or conduct a one off transaction with a PEP there must be:
Appropriate risk based procedures to determine whether a customer is a PEP;
Obtain appropriate senior management approval to engage with such customer;
Take adequate measures to establish the source of wealth and source of funds which are involved in the proposed business engagement or occasional transaction; and
Conduct enhanced ongoing monitoring of the relationship
Simplified Due Diligence
Simplified procedures may be applied to certain customers who may be regulated and / or listed entities subject to specified disclosure obligations, public authorities, EU institutions, certain pension funds and low-risk products.
Customer Due Diligence – Personal Data regulated by the Data Protection Act 1998
The information obtained / retained by a relevant person for the purposes of customer due diligence falls within the definition of personal data and in the UK, the processing or retaining of personal data is governed by the Data Protection Act 1998 (DPA).
The DPA regulates the processing of‘personal data’ and applies only to individuals and not legal persons. Protection is not extended to corporate data.
There is a separate definition of“sensitive personal data” in Section 2 of the DPA.
“sensitive personal data” means personal data consisting of information as to—
(a)the racial or ethnic origin of the data subject,
(b)his/her political opinions,
(c)his/her religious beliefs or other beliefs of a similar nature,
(d)whether he/she is a member of a trade union (within the meaning of the Trade Union and Labour Relations(Consolidation) Act 1992),
(e)his/her physical or mental health or condition,
(f)his/her sexual orientation,
(g)the commission or alleged commission by him of any offence, or
(h)any proceedings for any offence committed or alleged to have been committed by him, the disposal of such proceedings or the sentence of any court in such proceedings.
For further information see ‘The Guide to Data Protection’ published by the Information Commissioner’s Office: https://ico.org.uk//for-organisations/guide-to-data-protection/