Reporting entities to identify and verify identity of customer

(1) Reporting entities shall establish the identity and verify the identity of any customer of the reporting entity by requiring the customer to produce an identification record or such other reliable, independent source document as the Minister may prescribe. (2) The requirements of sub-section (1), shall apply when– (a) a reporting entity establishes a business relationship; (b) in the absence of such a relationship, a reporting entity conducts– (i) any transaction in an amount equal to or above the sum of twenty thousand dollars or such other amount as may from time to time be prescribed by the Minister, whether conducted as a single transaction or several transactions that appear to be linked and where the amount of the transaction is unknown at the time of the transaction, the identification and verification shall be undertaken as soon as the amount becomes known or the said threshold is reached; and (ii) any wire transfers as set out in section 19 of this Act; (c) there is a suspicion of money laundering or terrorist financing; or (d) the reporting entity has doubts about the veracity or adequacy of previously obtained customer identification data. 44[CAP. 104 Money Laundering and Terrorism (Prevention) (3) Without limiting the generality of sub-section (1), a reporting entity shall– (a) when establishing a business relationship, obtain information on the purpose and nature of the business relationship and the source of funds; (b) if the transaction is conducted by a natural person, adequately identify and verify his identity including information relating to– (i) the person’s name and address; (ii) the national identity card, social security document, passport or other applicable official identifying document; or (iii) the source of funds; (c) if the transaction is conducted by a legal or legal information on that legal person or legal adequately the company, the beneficial owner and ultimate natural persons providing the funds of such legal person or legal arrangement and take reasonable measures to identify and verify the legal status, ownership and control structure, including measures for– (i) verifying proof of incorporation or similar evidence of establishment or existence; (ii) identifying and verifying the customer’s name, name of trustee and ultimate settler, for trusts, and identifying persons providing funds and council members, for foundations, legal form, head office address and identities of directors, for legal persons, and source (iii) verifying that any person purporting to act on behalf of the customer is authorised to do so, identifying that person and verifying the identity of that person; and (iv) where the reporting entity carries on insurance business, identifying each beneficiary under any long term or investment linked policy issued or to be issued by the reporting entity and verifying the of each beneficiary; (d) have appropriate risk management systems to determine if a potential customer, customer or beneficial owner is, is likely to be, is found to be or becomes a politically exposed person, or family member or close associate of the politically exposed person and if so, shall– (i) adequately identify and verify his identity as set out in this section; (ii) the approval of senior management before establishing or counting a business relationship with the politically exposed person or family member or close associate of the politically exposed person; and (iii) take reasonable measures to establish the source of funds and source of 46[CAP. 104 Money Laundering and Terrorism (Prevention) (iv) (e) perform due diligence measures on a risk sensitive basis which are consistent with guidelines issued by the competent authority or a supervisory authority; and (f) upon the establishment of a business relationship, and when completing the verification of the identity of the customer and beneficial ensure that laundering risks are effectively managed. (3A) A reporting entity shall conduct ongoing monitoring of a business relationship. (3B) In applying due diligence measures and conducting ongoing monitoring, a reporting entity shall– (a) assess the risk that any business relationship or occasional transaction involves, or will involve, depending upon the type of customer, business relationship, product or transaction; and (b) be able to demonstrate to the supervisory (i) that the extent of the due diligence measures applied in any case is appropriate having regard to the circumstances of the case, including the risks of money laundering and terrorist financing; and (ii) that it has obtained appropriate information to carry out the risk assessment required under paragraph (a). (3C) For the purposes of this section, “ongoing monitoring” of a business relationship means– (a) scrutinising undertaken throughout the course of the relationship, including where necessary the source of funds, to ensure that the transactions are consistent with the reporting entity’s knowledge of the customer and his business and risk profile; and (b) keeping the data or information obtained for the purpose of applying due diligence measures up-to- date and relevant by undertaking reviews of existing records. (4) If it appears to a reporting entity that an applicant requesting it to enter into any business relationship or transaction, whether or not in the course of a continuing business relationship, is acting on behalf of another person, the reporting entity shall establish the true identity of any person on whose behalf or for whose ultimate benefit the applicant may be acting in the proposed transaction, whether as a trustee, nominee, agent or otherwise. (4A) A reporting entity shall, on a risk-sensitive basis, apply enhanced due diligence measures and undertake enhanced ongoing monitoring– (a) where the customer has not been physically present for identification purposes; (b) where the reporting entity has, or proposes to have, a business relationship with, or proposes to carry out an occasional transaction with, a person connected with a country that does not apply, or insufficiently applies, the FATF Recommendations; 48[CAP. 104 Money Laundering and Terrorism (Prevention) (c) where the reporting entity has or proposes to have a banking or similar relationship with an institution whose address for that purpose is outside Belize; (d) where the reporting entity has or proposes to have a business relationship with, or to carry out an occasional transaction with, a politically exposed person or a family member or close associate of a politically exposed person; (e) where any of the following is a politically exposed person or a family member or close associate of a politically exposed person– (i) a beneficial owner of the customer; (ii) a third party for whom a customer is acting; (iii) a beneficial owner of a third party for whom a customer is acting; or (iv) a person acting, or purporting to act, on behalf of the customer; (f) in any other situation which by its nature can present a higher risk of money laundering or (4B) Where a reporting entity applies due diligence measures to, or carries out ongoing monitoring with respect to, an individual who is not physically present, the reporting entity, in addition to complying with this section and any regulations or guidelines with respect to due diligence measures, shall have policies and procedures to address specific risks associated with non-face-to-face business relationships or transactions and– (a) perform at least one additional check designed to mitigate the risk of identity fraud; and (b) apply such additional enhanced due diligence measures or undertake enhanced ongoing monitoring, as the reporting entity considers appropriate, if any. (4C) For the purposes of this section, “enhanced customer due diligence measures” and “enhanced ongoing monitoring” mean customer due diligence measures, or ongoing monitoring, that involves specific and adequate measures to compensate for the higher risk of money laundering or terrorist financing. (5) Nothing in this section shall require the production of any evidence of identity where– (a) the customer is itself a financial institution to which this Act applies and which has been licensed or registered, and is supervised for anti-money laundering and countering the financing of terrorism measures by a regulatory authority and the reporting entity has satisfied itself as to the adequacy of the measures to prevent money laundering and the financing of terrorism; or (b) there is a transaction or a series of transactions taking place in the course of a business relationship, in respect of which the applicant has already produced satisfactory evidence of (5A) Sub-section (5) does not apply where– (a) the reporting entity suspects money laundering or terrorist financing; 50[CAP. 104 Money Laundering and Terrorism (Prevention) (b) the customer is located, or resides, in a country that does not apply, or insufficiently applies, the FATF Recommendations; or (c) a higher risk of money laundering or terrorist financing has been identified. (6) A bank or financial institution that is in, or that proposes to enter, a correspondent banking relationship, that undertakes securities transactions or funds transfers on a cross-border basis, or provides finance to facilitate international trade shall– (a) apply due diligence measures on respondent banks using a risk-based approach that enables the bank or financial institution to fully understand the nature of the respondent bank’s business and which takes into account, in particular– (i) the respondent’s domicile; (ii) the respondent bank’s ownership and management structure; and (iii) the respondent bank’s customer base, including its geographic location, its business, including the nature of services provided by the respondent bank to its customers, whether or not relationships are conducted by the respondent on a non-face-to-face basis and the extent to which the respondent bank relies on third parties to identify and hold evidence of identity on, or to conduct other due diligence on, its (b) take appropriate measures to ensure that it does not enter into, or continue, a correspondent banking relationship with a bank that is known to permit its accounts to be used by a shell bank; (c) determine from publicly available sources the reputation of the respondent bank and the quality of its supervision, including whether it has been subject to a money laundering or terrorist financing investigation or regulatory (d) assess the respondent bank’s anti-money laundering and terrorist financing systems and controls to ensure that they are consistent with the requirements of the FATF Recommendations; (e) not enter into a new correspondent banking relationship unless it has the prior approval of senior management; (f) ensure that the respective laundering and counter terrorist financing responsibilities of each party to the correspondent relationship are understood and properly documented; (g) ensure that the correspondent relationship and its transactions are subject to annual review by senior management; (h) be able to demonstrate that the information obtained in compliance with the requirements set out in this sub-section is held for all existing and new correspondent relationships; (i) not enter into or continue a correspondent banking relationship52[CAP. 104 Money Laundering and Terrorism (Prevention) (i) with a shell bank; or (ii) where it has knowledge or suspicion that the respondent or any of its customers is engaged in money laundering or the financing of terrorism; or (j) where it provides customers of a respondent bank with direct access to its services, whether by way of payable-through accounts or by other means, ensure that it is satisfied that the respondent bank– (i) has undertaken appropriate due diligence and, applicable, enhanced due diligence in respect of the customers that have direct access to the correspondent bank’s services; and (ii) is able to provide relevant due diligence information and verification evidence to the bank or financial institution upon (6A) A reporting entity shall– (a) adopt risk management procedures not inconsistent with this Act concerning the conditions under which a customer may utilize a business relationship prior to verification of the identity of that customer; (b) consider making a suspicious transaction report when terminating an application for a business relationship or a one-off transaction due to inability to identify and verify the identity of the applicant; (c) terminate the relationship and consider making a suspicious transaction report where the financial institution has doubts about the veracity or adequacy of previously obtained customer identification; or (d) terminate a business relationship when the reporting entity is unable to undertake ongoing monitoring with respect to the relationship. (7) Where a reporting entity relies on an intermediary or third party to undertake its obligations under sub-sections (1), (2) or (3) or to introduce business to it– (a) it must be satisfied that the third party is able to provide copies of identification data and other documents relating to the obligation of due diligence under sub-sections (1), (2) and (3) without delay, including, without limitation, identification data and other documents relating to– (i) beneficial ownership; (ii) ownership and control structure; and (iii) purpose and intended nature of the business relationship; (b) it shall satisfy itself that the third party or intermediary is regulated and supervised, and has measures in place to comply with the requirements set out in sections 15 and 16 and in accordance with the FATF Recommendations on regulation, supervision and monitoring; 54[CAP. 104 Money Laundering and Terrorism (Prevention) (c) the reporting entity shall immediately obtain from the intermediary or third party, copies of identification data and other documents relating to the obligation of the customer due diligence process; (d) the reporting entity shall carry out a risk assessment to determine whether it is appropriate for it to rely on the intermediary or third party and, if so, whether it should put in place any measures to mitigate the additional risk; (dd) in carrying out a risk assessment referred to in paragraph (d), the reporting entity shall consider such criteria as are appropriate, including the following– (i) the stature and regulatory track record of the intermediary or third party; (ii) the adequacy of the framework to combat money laundering and financing of terrorism in place in the country in which the intermediary or third party is based and the period of time that the framework has been in place; (iii) the adequacy of the supervisory regime to combat money laundering and financing of terrorism to which the intermediary or third party is subject; (iv) the adequacy of the measures to combat money laundering and financing of terrorism in place at the intermediary or third party; (v) previous experience gained from existing relationships connected with the intermediary or third party; (vi) the nature of the business conducted by the intermediary or third party; (vii) whether relationships are conducted by the intermediary or third party on a face- to-face basis; (viii) whether specific relationships are fully managed by an introducer; (ix) the extent to which the intermediary or third party itself relies on third parties to identify its customers and to hold evidence of identity or to conduct other due diligence procedures, and if so who those third parties are; and (x) whether or not specific intermediary or introduced relationships involve politically exposed persons, family members or close associates of politically exposed persons or other higher risk relationships; or (e) the reporting entity shall maintain ultimate responsibility for customer identification and verification of customer identity. (7A) For the purposes of this section– (a) “correspondent banking relationship” means a relationship that involves the provision of banking by one bank, the correspondent bank, to another bank, the 56[CAP. 104 Money Laundering and Terrorism (Prevention) “respondent bank”, and, without limitation, (i) cash management, including establishing interest-bearing accounts in different currencies; (ii) cheque clearing; (iii) payable-through accounts; and (iv) foreign exchange services; and (b) “shell bank” means a bank that– (i) is incorporated and licensed in a country in which it has no physical presence involving meaningful decision-making and management; and (ii) is not an affiliate of a corporate body that(A) has a physical presence in a country that involves meaningful decision-making and management; (B) is authorised to carry on banking business in that country; and (C) is subject to effective consolidated supervision in relation to its banking business, which extends to its affiliates. (8) The Minister may, in consultation with the relevant supervisory authority, prescribe– (a) the official or identifying documents, or the reliable and independent source documents, data or information or other evidence that is required for identification or verification of any class of customers or applicants; or (b) threshold and additional circumstances in which the provisions of this section shall apply. (9) Repealed.