Customer Identification Procedures for Brokers

Transcription

1 Customer Identification Procedures for Brokers Procedures for identifying and verifying the identity of customers under the Anti-Money Laundering and Counter-Terrorism Financing Act and verifying the identity of mortgagors under real property legislation as an agent of ING. July 2016 Home Loans

2 Table of contents 1 Glossary of Terms 3 2 Introduction Responsibilities of agents of ING AML/CTF Act Purpose of this manual 4 3 Application Process Conduct Standard Identification and Verification Individuals Companies Trusts Broker assesses product and jurisdiction risk Product Risk Jurisdiction Risk Conduct Enhanced Identification and Verification Broker assesses customer risk as higher than standard ING assesses customer risk as higher than standard Submit loan application, Identification Form and copies of identification 9 4 Training Initial Screening 10 5 Record Keeping 10 6 Suspicious Matter Reporting Guidelines to trigger suspicions Tipping off 11 7 Where do I go to get clarification on an AML/CTF question? 11 8 Appendix A: Identification Form 12 Page 2 of 11 ING IM382 08/17

3 1 Glossary of Terms Term Accredited Introducer AML/CTF Act Broker Identification Identification Form MFAA/FBAA/FPA Money Laundering Politically Exposed Person (PEP) Reporting Entity Meaning An introducer who has been accredited with ING to introduce home loan customers. The Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) regime. The Introducer, its agent or intermediary as defined in the Introducer Agreement The collection of information from a customer to assist in understanding who they are. The form released by ING to be used when interviewing a customer face to face. This form outlines the information that must be collected by brokers to appropriately identify and verify the identity of potential customers who are individuals. This form (at Appendix A) must be completed before a loan can be approved. Mortgage & Finance Association of Australia Finance Brokers Association of Australia Financial Planning Association Money Laundering (ML) is the processing of criminal profits to disguise their illegal origin. Money laundering can be used to hide the proceeds of serious crime such as drug trafficking, weapons dealing and people smuggling or crimes such as tax evasion and fraud. A politically exposed person is an individual who has been entrusted with prominent public functions, for example Heads of State or of Government, senior politicians, senior government, judicial or military officials, senior executives of state owned corporations, or important political party officials. The definition may also extend to family members or close associates of politically exposed persons. A person who has obligations under the AML/CTF Act including to identify and verify the identity of its customers. SSU Sales Support Unit, ING, GPO Box 4094, Sydney NSW 2001 Terrorism Financing Verification Includes the financing of terrorist acts, and of terrorists and terrorist organisations. Financial institutions already have legal obligations preventing us from dealing in any way with known terrorists. A process to verify the identification information provided by a customer, traditionally undertaken through the collection of identification documents but can also be done through electronic data. Page 3 of 11 ING IM382 08/17

4 2 Introduction The AML/CTF Act imposes various obligations on Reporting Entities such as ING including identifying, managing and mitigating the money laundering and terrorist financing risk that ING may reasonably face in relation to the provision of designated services to its customers. In addition, under real property legislation a mortgagee must take steps to confirm the identity of a mortgagor (customer) prior to settlement of a home loan. 2.1 Responsibilities of agents of ING As an Accredited Introducer of ING, you are authorised to perform customer identification under the AML/CTF Act and other applicable laws on our behalf as our agent, on the basis that you do so in accordance with the procedures set out in this document and any other relevant procedures specified by ING. 2.2 AML/CTF Act Under section 37 of the AML/CTF Act, a reporting entity may authorise another person to be its agent for the purposes of carrying out customer identification procedures in respect of a customer on its behalf. 2.3 Purpose of this manual The purpose of this manual is to: a) Set out procedures under the Introducer Agreement that you must comply with for the purposes of compliance with the AML/CTF Act, and prescribed requirements under real property legislation for verification of identity. b) Specify training that the Introducer and each of its agents and intermediaries must undergo. The procedures including revised customer identification procedures apply to all customers introduced to ING on and after 1 August Page 4 of 11 ING IM382 08/17

5 3 Application Process The following diagram represents the customer identification process to be undertaken by the Broker on behalf of ING. Each section of this diagram is explained in further detail throughout this guide. Customer wishes to apply for an ING home loan YES Will the customer's identity be verified during a face to face interview? NO Broker conducts face to face identification using prescribed Identification Form Broker is unable to complete face to face identification e.g client is interstate, or the broker is submitting a loan for themselves, a partner, spouse or dependent. Customer to complete Australia Post Land title identification form and submit at participating Australia Post outlet Broker assesses product and jurisdiction risk (based on industry) Conduct enhanced identification and verification. YES Does the customer present a higher risk? NO Conduct standard identification and verification Submit loan application, prescribed Identification Form and legible copies of all identification to ING. Upon receipt of the application, ING will assess customer risk and may request additional information. Any suspicious matters should be escalated to ING immediately. Page 5 of 11 ING IM382 08/17

6 3.1 Conduct Standard Identification and Verification The objective of the identification procedure is to determine if the customer is the person or entity they claim to be. Standard identification procedures are different depending on the customer type. ING deals with the following customer types: Individuals and Sole Traders Companies Trusts Partnerships Associations Individuals The following procedure should be applied to individual borrowers, guarantors, ultimate beneficial owners/ beneficiaries with 25% or more assets or controllership, authorised signatories and agents such as persons acting under authority of a Power of Attorney Identification For the purpose of identification, a customer s application for a home loan cannot proceed unless at a minimum, the following information is provided for each loan applicant who is an individual: Full name and Residential address Date of Birth Nationality (Additional information will be collected as part of credit assessment procedures however the information above is mandatory for every application.) Verification when conducting a face to face interview ING has developed an Identification Form see (Appendix A). Brokers can use the Identification Form in Appendix A to enable brokers to easily satisfy the verification of customer s identity. To correctly complete the form, follow the steps below: 1. Conduct a face to face interview with the person being identified 2. Record details of the person being identified (including all of the details in above) 3. Collect the required identification documents (originals only) and make a copy of them 4. Record the identification documents provided and verify the customer's name and either the customer s residential address or date of birth from the required identification documents 5. Sign the form 6. Provide a copy of the customer's original identification documents and the completed Identification Form to ING. Please note: Brokers cannot identify themselves, their spouse, partner or a dependent. The documents that can be used to verify the identity of a customer are described in the Identification Form. You must sight and copy either: a) Two original photographic identification documents from List A; or b) One original photographic document from List A and one original document from List B Verification when unable to conduct a face to face interview Australia Post s Land title identity verification form (available on the Introducer website) can be used by Brokers to satisfy the verification of a person s identity if they are unable to meet with the person face to face. Please note every effort should be made to conduct a face to face interview. The customer will need to follow the instructions on the form and lodge at any participating Australia Post retail outlet. Note this form should also be used if the applicant is also the Broker, or the Broker s spouse, partner, or dependent. Page 6 of 11 ING IM382 08/17

7 3.1.2 Companies Identification For the purposes of identification under the AML/CTF Act, a customer s application for a loan if applying in the capacity of a proprietary or private domestic company must include the following information: Full name of the company as registered by ASIC Full Address of the company s registered office Full Address of the company s principal place of business (if any) ACN Whether the company is registered by ASIC as public or proprietary For proprietary companies, the full name of each Director of the company The full name of each beneficial owner of the company (any individual owning directly or indirectly 25% or more of the company or who directly or indirectly controls the company). The date of birth of each beneficial owner of the company (any individual owning, directly or indirectly, 25% or more of the company, or who directly or indirectly controls the company). The full address of each beneficial owner of the company (any individual owning directly or indirectly 25% or more of the company or who directly or indirectly controls the company). Business activity and industry type Source of funds (Additional information will be collected as part of credit assessment procedures however the information above is mandatory for every application for a domestic company) Verification ING will verify the required information about the company. However, it is the Broker s responsibility to ensure all individual Directors, beneficial owners, guarantors and authorised signatories are identified according to the procedure described in paragraph above for verification of individuals Trusts Identification For the purposes of customer identification of customers who wish to apply for a loan in their capacity as trustee of a trust the following information must be collected at a minimum: Full name of the trust Full business name (if any) of the trustee in respect of the trust Type of trust Country in which the trust was established Full name of the Settlor of the trust For trusts with individual trustees: See the requirements of individuals in paragraph above For trusts with company trustees: See the requirements for companies in paragraph above For trusts with individual trustee(s) and company trustee(s): The identification information for individuals and companies in paragraphs and Above must be collected. Full name of each beneficiary in respect of the trust (or if the terms of the trust identify the beneficiaries by reference to membership of a class - details of the class). This information should be provided to ING by completing the Company and Trust Appendix form and forwarding this with the Application form (Additional information will be collected as part of credit assessment procedures however the information above is mandatory for every application) Verification ING will verify the required information about the trust however the Broker must obtain from the customer the original or a certified copy of the Trust Deed and make and provide a copy of that document to ING s solicitors.however, it is the Broker s responsibility to ensure all individual Trustees, ultimate beneficial owners/ beneficiaries with 25% or more direct/indirect or asset ownership, guarantors and authorised signatories are identified according to the procedures described in paragraphs above for verification of individuals. Page 7 of 11 ING IM382 08/17

8 3.2 Broker assesses product and jurisdiction risk The AML/CTF Act requires Reporting Entities to consider the risk posed by the following factors and to tailor their procedures accordingly: customer types; products; channels of delivery; and foreign jurisdictions (eg of the customer, product, service, reporting entity or transactions) Customer sources of funds and wealth For the purposes of introducing a home loan customer to ING, the Broker only needs to consider product and jurisdiction risk. Upon receipt of the application, ING will assess the customer risk and determine if additional customer due diligence is required Product Risk As described in the MFAA AML/CTF training and accreditation package, the following table outlines the product risk associated with different product types in the mortgage lending industry. Should the customer be applying for any product in the standard risk category, apply the standard customer identification procedure. At this stage, ING does not offer products that are higher risk. Standard Risk Standard Variable Rate Residential Mortgage Equity Release Mortgage Standard Fixed Rate Residential Mortgage Standard Capped/Floored/Belted Residential Mortgage Equity Finance / Shared Appreciation Mortgage Residential Mortgage with tied credit card facility Novated lease (vehicle) Bank Guarantee Business Loan Construction Loan Offset Residential Mortgage Chattel mortgage Hire Purchase Novated lease (property) Partnership commercial loan Reverse Novation Commercial Overdraft Lo-doc Residential Mortgage Commercial Line of Credit Higher Risk Letter of Credit Pre-shipment finance Jurisdiction Risk The following factors should be considered in determining if the customer presents a higher than normal jurisdictional risk: Customer is not located in Australia Asset purchased with the loan is not located in Australia In the event a factor above is evident during the risk assessment, a higher standard of identification and verification is required. Refer to Section 3.3 below for enhanced customer verification requirements. 3.3 Conduct Enhanced Identification and Verification In the event the customer poses a higher than normal risk or additional information is required to satisfy know your customer reporting obligations, additional due diligence is required Broker assesses customer risk as higher than standard This would occur if either the product or jurisdiction factors described are applicable to the loan. a) If the customer is not located in Australia, perform the following: Determine the customer s reason for wanting the product Record response on application (or attach separate paperwork) Collect the country of residence Collect additional know your customer information or request additional verification evidence to confirm information provided (see below) Page 8 of 11 ING IM382 08/17

9 b) If the customer wishes to purchase assets not located in Australia: Determine the type of asset being purchased Determine the country of purchase Record response on application Additional know your customer information may include (depending on the customer type): any other name the customer is known by; the customer s country of residence; the customer s occupation or business activities; the nature of the customer s business with ING including - the purpose of specific transactions; or the expected nature and level of transaction behaviour; the income or assets available to the customer; the customer s source of funds including the origin of funds; the customer s financial position; the beneficial ownership of the funds used by the customer with respect to products held; the beneficiaries of the transactions being facilitated by the reporting entity on behalf of the customer including the destination of funds; the full business name (if any) of the business as registered under any State or Territory business names legislation; the name of any individuals involved in the business; collection of identification information of individuals behind the business; the nature of the business activities conducted; the date of incorporation or registration of the business. Additional verification may include additional documents or data to verify the information provided by the customer ING assesses customer risk as higher than standard ING may instruct you to collect additional information from the customer. These additional requirements will become general conditions required before the loan can proceed to full approval. The following list includes examples of areas that ING may request further information on: Additional documentation to verify information about individuals or the borrowing entity in the event of a company or trust borrower Responses to various questions to ascertain areas such as the source of funds, reason for borrowing etc Additional information surrounding customers who are not residents of Australia Customer name matches on a Politically Exposed Person s list and enhanced due diligence is required This list is not exhaustive however serves to provide examples of information that may be required. 3.4 Submit loan application, Identification Form and copies of identification ING will continue to accept applications as per the current process. ING will also require copies of all identification documents before the loan can proceed. It is also important the Identification Form, and/or the Company & Trust Appendix are correctly completed and signed. Page 9 of 11 ING IM382 08/17

10 4 Training 4.1 Initial ING is a Reporting Entity and is responsible for ensuring all our employees and agents are AML/CTF trained and compliant. The Broker must complete a training program endorsed by the MFAA and/or FBAA prior to becoming accredited to introduce customers to ING. The Broker s aggregator must maintain copies of training records and produce them as and when requested by ING. 4.2 Screening ING has an obligation to perform due diligence on all third parties who assist with performing its obligations under the AML/CTF Act. For this reason, ING requires all accredited introducers to be members of a professional association to ensure this screening is performed. Any introducer who is accredited via an aggregator must be appropriately screened by that aggregator. Screening should comply with the requirements of Australian Standard 4811 Employment Screening and aggregators should advise ING if they do not comply with this standard. Aggregators must keep records of screening undertaken, and make these available to ING upon request. 5 Record Keeping The AML/CTF Act outlines record-keeping requirements for records relating to identification procedures. All records collected by brokers from and on behalf of customers on and after 12th December 2007 must be sent to ING. This includes every document collected for the purpose of identifying and verifying the customer and all other required documents to approve the loan (including but not limited to those specified in Section 3). ING will hold all records and we do not require the brokers to retain these records under the AML/CTF Act. Records relating to identification procedures include all of the following: procedures regarding how identification is carried out the copies of documents made as specified in Section 3 and other documents obtained from the customer including any further information or documents requested by ING results of electronic verification any other information obtained during the identification procedure Record-keeping requirements extend to all customers who are identified, even if they do not proceed with taking up the designated service or product. ING reserves the right to request further copies of documents from brokers where the copies received are not clear and/or not completed. Length of time to retain records: We are required to retain identification records for a period of seven years commencing from the time we cease to have a relationship with the customer (i.e. seven years after the account is closed.) 6 Suspicious Matter Reporting As our agents, brokers are in some cases best equipped to identify suspicious matters on behalf of ING. ING has an obligation to report certain suspicious matters to AUSTRAC within three days of a suspicion being formed or within 24 hours if the suspicion relates to the financing of terrorism. Suspicious matters must be reported even if the transaction or account does not proceed. Matters that AUSTRAC requires us to report include suspicions that: the customer (or their agent) is not who they claim to be information provided may be relevant to an investigation or prosecution of a person for: (a) evasion or attempted evasion of tax (whether Commonwealth, State or Territory) (b) an offence against a State, Territory or Commonwealth Law (c) a money laundering offence; and/or (d) a financing of terrorism offence. the person is or may be attempting to disguise the proceeds of crime the person is or may be attempting to finance terrorist activities the person is or may be attempting to launder money. If you have a suspicion about a customer, you must escalate it immediately to ING. 6.1 Guidelines to trigger suspicions Page 10 of 11 ING IM382 08/17

11 Suspicious activity can come in many forms, below are some examples to help you identify suspicious activity. The list is not exhaustive but aims to serve as a guide. An individual with discrepancies between their identification documentation; An individual who presents seemingly false identification; Any case when there is no obvious reason why a person is using the Bank s services; Any use of false names; An individual with a variety of similar, but different, addresses; An individual who requests to be anonymous and makes unusual requests or wishes to disguise their purpose for requesting the account A business with account turnover or large transactions inconsistent with the size of their business; and Restructuring large transactions into smaller transactions to avoid having the transactions reported to AUSTRAC. 6.2 Tipping off Where a suspicious matter comes to your attention you have an obligation to report this to ING immediately. However you must not, in any circumstances inform anyone else (including the customer or their agent) that the matter has been reported to ING or AUSTRAC. Severe penalties apply for persons found guilty of tipping off; these penalties include imprisonment for two years. 7 Where do I go to get clarification on an AML/CTF question? Your first point of contact is the Introducer Website. Please check for updates. You can also contact your Business Development Manager or Relationship Manager. For accreditation related matters, please contact Intermediary Services by intermediary.services@ing.com.au References The Mortgage & Finance Association of Australia (MFAA) Search for AML to go to the AML link The Australian Transaction Reports & Analysis Centre (AUSTRAC) Attorney General s Department Page 11 of 11 ING IM382 08/17