Kim Berke­ley

To com­bat mon­ey laun­der­ing ac­tiv­i­ty two types of of­fences ex­ist. The first is the of­fence of mon­ey laun­der­ing ("ML"), which was ad­dressed in a pre­vi­ous ar­ti­cle. The sec­ond type of of­fence is any breach of an­ti-mon­ey laun­der­ing ("AML") reg­u­la­tions.

The AML regime was es­tab­lished to pre­vent or min­imise the risk that ML pos­es to the fi­nan­cial sec­tor and to re­port such ac­tiv­i­ties in or­der to as­sist in the de­tec­tion and pre­ven­tion of ML, and to pe­nalise those who fail to im­ple­ment AML.

The Pro­ceeds of Crime Act ("POCA") is the pri­ma­ry Act which deals with the of­fence of ML and the con­fis­ca­tion of pro­ceeds of crime. The Fi­nan­cial Oblig­a­tion Reg­u­la­tions ("FORs") is the sec­ondary leg­is­la­tion to the POCA. It is the FORs that sets out the oblig­a­tions for an AML regime which must be im­ple­ment­ed by fi­nan­cial in­sti­tu­tions, non-reg­u­lat­ed fi­nan­cial in­sti­tu­tions such as cred­it unions and mon­ey or val­ue trans­fer ser­vices, and "List­ed Busi­ness­es".

"List­ed Busi­ness­es" are those types of busi­ness­es and pro­fes­sion­als list­ed un­der POCA such as re­al es­tate ser­vices, mo­tor ve­hi­cle sales, jew­ellery busi­ness, pri­vate mem­bers' clubs, na­tion­al lot­ter­ies and on­line bet­ting games, pool bet­ting, art deal­ers, trust and com­pa­ny providers, as well as at­tor­neys-at-law and ac­coun­tants who per­form cer­tain ser­vices.

The FORs in­clude reg­u­la­tions for Cus­tomer Due Dili­gence ("CDD") which must be car­ried out by all the busi­ness­es and in­sti­tu­tions list­ed. It can be sim­pli­fied or en­hanced de­pend­ing on cat­e­gories of cus­tomers con­sid­ered as ei­ther high risk or low risk. It refers to the gath­er­ing of cus­tomer iden­ti­fi­ca­tion and in­for­ma­tion which would as­sist a busi­ness in as­sess­ing any risk posed by the cus­tomer in­clud­ing the risk of in­volve­ment in ML.

Apart from CDD reg­u­la­tions deal­ing specif­i­cal­ly with in­sur­ance com­pa­nies, Reg­u­la­tion 11 states that CDD must be car­ried out on all cus­tomers at the out­set of form­ing a busi­ness re­la­tion­ship–where there is a one-off oc­ca­sion­al trans­ac­tion of nine­ty-thou­sand dol­lars or more; where there is a se­ries of trans­ac­tions amount­ing to nine­ty-thou­sand dol­lars or more; or where there is one-off, oc­ca­sion­al or se­ries of wire trans­fer(s) amount­ing to six thou­sand dol­lars or more. For pri­vate mem­bers clubs CDD must be done where there is a trans­ac­tion or se­ries of trans­ac­tions amount­ing to eigh­teen thou­sand dol­lars or more.

Reg­u­la­tion 15 man­dates busi­ness­es to there­fore ob­tain the fol­low­ing in­for­ma­tion: full name of cus­tomer; per­ma­nent ad­dress and proof of same; date and place of birth; na­tion­al­i­ty; place of busi­ness/oc­cu­pa­tion; oc­cu­pa­tion­al in­come (where ap­plic­a­ble); a sig­na­ture; pur­pose and in­tend­ed na­ture of pur­pose and source of funds; and any oth­er in­for­ma­tion which may be rel­e­vant.

Sat­is­fac­to­ry proof of iden­ti­fi­ca­tion is a valid pass­port, a na­tion­al iden­ti­fi­ca­tion card or a dri­ver's li­cence.

Where a cus­tomer is a busi­ness, in ad­di­tion to what is set out in Reg­u­la­tion 15 there must be ver­i­fi­ca­tion of the iden­ti­ty of the di­rec­tors, part­ners, ac­count sig­na­to­ries, ben­e­fi­cial own­ers and any oth­er rel­e­vant of­fi­cers. Oth­er doc­u­ments re­quired will in­clude a cer­tifi­cate of in­cor­po­ra­tion, ar­ti­cles of in­cor­po­ra­tion, copy of bye-laws, man­age­ment ac­count for pre­vi­ous three years or three- year es­ti­mates as would ap­ply, and in­for­ma­tion on the iden­ti­ty of share­hold­ers hold­ing more than 10 per cent of share cap­i­tal.

This col­umn is not le­gal ad­vice. If you have a le­gal prob­lem, you should con­sult an at­tor­ney-at-law.