I posted this question in another forum as well and wonder if there is anyone here who could enlighten on their politics in regards of the question:
The question: Depending on where you live or do business, when entering into a financial transaction does your country of residence and/or the country of transaction require you to id the participants under the money laundering regulations and keep record for various years subject to possible investigations?
In my job we audit every transaction and if there is no id attached to the files we (actually means myself) give the participants in the network hell because they open the partnership to a liability issue and we keep the id's for 10 years with a specialised secure storage. The term 10 years is defined by the time we need to hold documentation for tax reason. Since we do have an institutional in-house bank operating in the financial markets of the G7 countries I also file SAR (suspicious activity reports) so the data is needed.
That does not apply to brokers, however isn't there a liability on the brokerage side for the id requirements and the document keeping under your local money laundering provisions and tax regulations?
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however isn't there a liability on the brokerage side for the id requirements and the document keeping under your local money laundering provisions and tax regulations?
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As far as I know for Europe: yes. Any broker and intermediary would be included ....
identifying and verifying the identity of the recipient
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August 29 2007, 8:06 AM
Taken from the europa.eu:
Obligation of legal professions to be vigilant vis-à-vis their customers
The Directive applies to credit and financial institutions and to natural or legal persons working as auditors, external accountants and tax advisers, notaries and other legal professions, real estate agents, etc. (see Article 2). The institutions and professions covered by the Directive are required to apply customer due diligence measures in the following cases:
when establishing a business relationship;
when carrying out occasional transactions amounting to EUR 15 000 or more;
when there is a suspicion of money laundering or terrorist financing, regardless of any exemption or threshold;
when there are doubts about the veracity or adequacy of previously obtained customer identification data.
These diligence measures involve identifying the customer and verifying his identity, obtaining information on the purpose and intended nature of the business relationship and, where appropriate, identifying and verifying the identity of the recipient, etc. The extent of such measures may be determined on a risk-sensitive basis depending on the type of customer, business relationship, etc. Member States may allow the institutions and persons covered by the Directive to call on third parties to meet these requirements. Nevertheless, the Directive allows simplified customer due diligence, for example in relation to national public authorities or customers with life insurance policies with an annual premium of no more than EUR 1 000.
Where there is a high risk of money laundering or terrorist financing, the persons and institutions covered by the Directive are required to apply enhanced due diligence. Enhanced due diligence involves supplementary measures to verify or certify the documents supplied when the customer has not been physically present for identification purposes or in respect of cross-frontier relationships with respondent institutions from third countries, the assessment of a third-party institution's anti-money laundering and anti-terrorist financing controls, etc.
Finally, credit and other financial institutions are prohibited from keeping anonymous accounts or anonymous passbooks.
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as far as I remember the term in the code is like"financial enterprise" and thats pretty broad, so it involves not only lawyers and similar professions but people active in financial services (even unregulated) or am I on the wrong track
anyone in the far east who can tell what the details are in his country?
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I hopoe this can help you. I have just opened today an account for a client with Barclays Wealth on the Isle of Man. I was personally present with the client and to satisfy the money laundering regulations the following were required and present.
photo id. driving licence and passport YES BOTH, If the client is a non driver then he must sign a document to that effect which is then qualified based on the remainig documents
any two service bill from the following list i.e. water, telephone (not mobile) local tax bill rent or mortgage bill,tax return, bank statement to show proof of fixed above
a brief outline of his working career and the source of his income.
a brief outline of why he needed a secondary account and the purposes for the use of the account.
Once a diligence is completed then the account opening will be processed and opened. Once opened he can work the account on line and give instructions on line.
Most countries in Europe and Asia will require the above some even go further in asking for proof of visa issuance to show that you have been in the countries you name or even have a visa to enter the county where you make application for the account, dependent of you home passport and its visa requirement.
US citizens looking to open ac****s in europe now must show that they have applied for and received SEC clearing to move funds abroad and the purpose for the movement of those funds, not because the europeans want to know but the SEC want to know.
I have with the help of banks wwith whom i work created a solution to this problem for US citizens which complies with US regulations SEC regulations, Patriot ACT. It works very well is my main source of business and can create capital protection guarantees for the their investments into european markets. All meet with the SEC Criteria, tax requirements etc
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thanks, I'm familiar with the requirements of the banks (however doubt the part you mention on the SEC since thats not their area of work and I do believe there is no need for any clearing from a government authority but its registered by the transferring bank) my question more purports to the brokerage:
The question there: Isn't it the legal requirement for the broker, acting as a financial intermediary and therefore established as financial enterprise, to establish identity of the client when dealing in amounts above 15.000,00 Euro or similar outside the EU and keep the record of the business including the id when it is concluded for the perusal of the authorities within a certain time limit. (tax and criminal authorities).
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I am a director of a Brokerage Firm on the Isle of Man and Austria.
on intaking investors we are legally bound to complete the Due Diligence and KYC investigation
before making a proposal to our banks.
To register the client again we have the responsibility to complete and File the DD report to the authorities for Hedge, Fixed Trade profits etc. The bank will not do this work for us or accept the responsibility for the status of the client that rests firmly with the company.
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