The following text is taken from "GUIDANCE NOTES ON THE PREVENTION OF MONEY LAUNDERING".

The Guidance Notes have been issued by H.E. The Governor of Anguilla following consultation by the Financial Services Department with the Anguilla Financial Services Association and the Eastern Caribbean Central Bank. They are based on similar Guidance Notes that have been issued in the United Kingdom and in other jurisdictions with a financial services industry. The Anguilla Government is grateful to the Joint Money Laundering Steering Group of the UK for granting it permission to draw on their Guidance Notes.

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Identification procedures - know your customer

3.01 Introduction

The “know your customer” rule should be applied by all financial services businesses, although the extent of validation required may depend upon the type of business being undertaken and the procedures to be followed will depend upon the legal personality of the applicant for business and the capacity in which he is applying.

If a client establishes a business relationship using a false identity, he may be doing so for the purpose of defrauding the financial services business itself or to ensure that he cannot be traced or linked to the proceeds of a crime that the business is being used to launder. In either case the business is at risk. Furthermore, a false name, address or date of birth will usually mean that law enforcement agencies cannot trace the client if he is needed for interview in connection with an investigation.

Subject to the exceptions specified in the Regulations, every regulated person should establish and verify, either directly or indirectly, the identity of every prospective client (called an "applicant for business" in the Regulations) and satisfy himself that the prospective client actually exists. These Guidance Notes set out what, as a matter of good practice, may reasonably be expected of a regulated person in determining what amounts to satisfactory evidence of identity. As the Notes are not exhaustive, there may be cases where a regulated person has properly satisfied himself that verification has been achieved by other means that he can, in the circumstances, justify.

When a business relationship is being established, the nature of the business that the prospective client expects to conduct with the regulated person should also be ascertained at the outset to show what might be expected as normal activity. In order to be able to judge whether a transaction is or is not suspicious, it is necessary to have a clear understanding of a client’s legitimate business.

Note that references in this section to:

• establishing or operating “an account” should be read as including establishing or operating any business relationship or carrying out a single transaction; and
• "verified identity" means, in the case of an individual, verified in the same manner as a prospective direct personal client and, in the case of a company, in the same manner as a prospective direct non-quoted corporate client.

3.02 Direct Personal (Individual) Clients

(a) General

In the case of direct personal clients (ie where no introduction has been made), a regulated person should aim to interview a prospective client in person.

Although a personal introduction from, for example, a known and respected client or an employee may be useful, it is unlikely that it will remove the need to verify the identity of a prospective client in the manner provided in these Guidance Notes. Any introduction should, in any event, be in writing and should contain the full name and address of the prospective client together with as much personal information as is relevant.

(b) What information should be obtained?

Regulated persons should obtain the following information concerning all prospective direct personal clients:

(i) full name and names used together with the reason for any aliases;

(ii) date and place of birth;

(iii) nationality;

(iv) current permanent residential address;

(v) telephone and fax number;

(vi) occupation and name of employer or, if self-employed, the nature of the business;

(vii) the reason for establishing the account and the nature of the business to be conducted;

(viii) estimated level of turnover expected for the account; and

(ix) the source of funds (i.e. generated from what transaction or business.)

(c) What evidence of identity is acceptable?

Identification documents, either originals or legally certified copies, should be pre-signed and bear a photograph of the applicant for identification at the interview. The following are acceptable:

(i) a current valid full passport; or

(ii) a full driving licence (provided it bears a photograph of the applicant).

Note that if, in exceptional cases, it is decided that a personal interview is not necessary, it is neither safe nor reasonable to expect a client to send an original passport or driving licence by post or courier service. In those circumstances, a legally certified copy should be requested.

(d) Documents that are not acceptable.

Identification documents that do not bear both a photograph and a signature or that are easy to obtain are not appropriate as sole evidence of identity. Examples include:

(i) birth certificates;
(ii) credit cards;
(iii) provisional driving licence;
(iv) business cards;
(v) social insurance, social security or health service cards; and

Any photocopies of documents showing photographs and signatures should be plainly legible.

(e) Further verification

Regulated persons should also take appropriate steps to verify the name and address of prospective clients by at least one further method, for example:

(i) obtaining verification of identity from a respected professional who knows the applicant (a suitable form for this purpose is set out in Appendix C.2);

(ii) checking the register of electors;

(iii) making a credit reference agency search;

(iv) checking a local telephone directory;

(v) requesting sight of a recent property tax or utility bill (care must be taken that the document is an original and not a copy); or

(vi) using one of the commercial address validation/verification services.

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