8. FACE TO FACE IDENTIFICATION

Transcription

1 8. FACE TO FACE IDENTIFICATION TABLE OF CONTENTS 8.1 Introduction The Source of Funds Identification Method Paper Verification Verification using Documentation Record-keeping Additional Verification Guidance for Non-UK Residents Verifying Non-UK Residents Cases Where Ordinary Verification Routes are Not Available Special Verification Scenarios Private Customers Policies for Children & Students Third Party Schemes The Mentally Incapacitated Asylum seekers Economic Migrants 9 1

2 8.1 Introduction When you are required to verify a customer s identity this must always be completed via the electronic ID system URU. The only exception to this is where the customer is not resident in the UK; in which the guidance in Section 7 must be followed. The ID verification must be completed following the URU procedures available on the Intrinsic Extranet system and must be completed before an application is submitted to a lender or product provider. Failure to follow this requirement will be considered a serious breach of the Sales Process. Whenever verification of identity is required you must retain either: a copy of the URU results showing a PASS decision a copy of the confirming a concession has been logged by the Financial Crime Team Where it is relevant you may also be required to retain: a certified copy of the original identification that you have seen; a certified copy signed by an appropriate third-party (see Section 7 for further guidance); or if, having seen the original identification you are unable to take a copy, a completed Identification Verification Certificate. Some lenders/providers will require you to send them a copy of the identification or a copy of the IVC with the application. Others may ask you to confirm that you have adequately identified the customer this may be done via the application process (tick box) or by completing a Confirmation of Verification Identification ( CVI) 8.2 The Source of Funds Identification Method This section applies to Designated Investments only. The Joint Money Laundering Steering Group guidance states that where the money laundering risk is at its lowest a payment being received from an account in the customer s name at a UK/EU regulated credit institution can be considered as sufficient proof of their identity. Therefore, the Source of Funds identification method should only be used as a process of last resort, in circumstances where all other route to verify the client s identity have failed. All requests to use Source of Funds must be referred to and approved by the Financial Crime Team in advance. 2

3 As guidance, for this method to be utilised the JMLSG state that the following conditions should apply to the product: it should not be capable of receiving or making payments from third parties, i.e. controls have to be in place to ensure that any payments in or out come and go to an account in the customer s name; redemption or withdrawal proceeds should not be permitted to be paid into an account that cannot be confirmed as belonging to the investor; cash withdrawals should not be permitted except by the investor and on a face to face basis, e.g. using a passbook at a bank counter; the characteristics of the product should be such that its features cannot be amended to allow any of the above. 8.3 Paper Verification As per 8.1 above you must verify all customer identity through the URU system prior to submitting an application. In some cases you may also be required to obtain sight of documentation to prove the client s name and address, or by relying on an appropriate third-party to verify and certify documentation (see Section 7) Verification using Documentation If you are using documentary evidence to prove identity you can only rely on sight of original documentation (not copies) and these can only be of the type specified below for purpose of address or name: Proof of Name Documents Current signed passport; EEA Member state identity card; Northern Ireland Voters Card; Residence Permit issued by the Home Office to EU Nationals; Current EEA or UK photo card driving licence; Blue disabled drivers pass; Current full UK driving licence (old version) but not old style provisional licenses; Benefit book or original notification letter from benefits agency confirming rights to benefits or state pension; Self-Employed in the Construction Industry photographic registration cards for individuals & partnerships (C1S4, C1S4 (P), C1S4 (T), C1S5, C1S6); Inland Revenue tax notifications (e.g. tax assessment, statement of account, notice of coding) but not P45 or P60 documents; or Shotgun or firearms certificates; 3

4 Proof of Address Documents Record of home visit; Confirming from an electoral register search that an individual of that name lives at the address; Recent utility bill or utility statement, or a certificate from a supplier of utilities confirming the agreement to pay for the services on pre-payment terms ( mobile telephone bills should not be accepted); Local authority tax bill valid for the current year; Current UK driving licence (if not used to prove name); EEA Member State identity card or a Northern Ireland voters card (if not used to prove name); Recent systems generated documentation from an FSA regulated financial sector firm indicating that an account / investment / insurance relationship exists and which contains the customer s address; Solicitors letter confirming recent house purchase or land registry confirmation; Local council rent card or tenancy agreement; Benefit book or original notification letter from benefits agency confirming rights to benefits or state pension (if not used to prove name); or Inland Revenue correspondence addressed to the applicant at the applicants stated address (provided these have not been used as proof of identity) Record-keeping You must take copies of the documents used for verification whenever possible e.g. when seeing a customer in your office or where copying facilities are available. Where it isn t possible for you to take copies of the documents that you have seen, you should record reference numbers and other relevant details of the identification of evidence on the IVC to enable investigating authorities to re-obtain the documents if necessary. To identify somebody face to face an official document bearing a photograph is preferred. Whenever you take copies of identification evidence the copies must be dated and signed original seen. Where a copy of evidence taken includes a photograph, and you are verifying the customer on a face-to-face basis you must also certify that the photograph provides a good likeness of the customer by writing on the photocopy the photograph is a good likeness of the applicant (or words to that effect). It is best practice to only retain copies of documentation in black and white, not colour, as colour documents increase the risk of identity theft and impersonation. 4

5 8.4 Additional Verification Guidance for Non-UK Residents Dealing with non-uk residents can lead to a greater and, in some cases, a significant risk of money laundering. Accordingly the legislation and guidance require more robust identity checks. Meeting with these requirements can be onerous and difficult at times and could lead to delays in your ability to action transactions for the customer. You should remain mindful at all times that verification of identity checks must be completed prior to conducting business and that failure to follow these procedures could lead to you being imprisoned or fined or both. Thus, when dealing with non-uk residents, we suggest that you make them aware of your obligations under prevention of money laundering legislation and manage their expectations accordingly Verifying Non-UK Residents The documentation that can be used to verify non-uk residents is more limited than that for those who are residing in the UK. The section below lists the acceptable forms of evidence. Proof of Name Documents evidence of name should be taken through sight of an original passport or national identity card only (refer to chapter 8 for details of the process if face to face contact is not possible); wherever possible copies of the pages containing reference numbers, date and country of issue should be taken; pages containing Visas and travel stamps should also be copied; in circumstances where taking copies of these pages is not possible you must ensure that you record all of this information on your file. Proof of Address Documents evidence of the customer s permanent (overseas) address must be obtained; this should be the best available and must be from an official source e.g. government, government agency or bank or credit institution; such evidence may be obtained directly from the customer i.e. sight of original correspondence from one of these agencies/institutions to the customer at their permanent address in the last 3 months or may be a confirmation of address received directly from these bodies; where the confirmation of address is received directly this document should be retained; where sight of documentation is provided by the customer you should take copies of this whenever possible. Where this is not practical you must note the name and type of the institution, the date of issue, the details of the address and any associated reference numbers. Should you have any doubt about the authenticity of the documentation provided you should check with the institution to verify that the details are correct and inform the Financial Crime Team immediately of the reasons for your doubts. 5

6 If the customer is a non UK national and has arrived in the UK in the last three months an additional check must be carried out by contacting the employer (or place of education) to corroborate the identification and permanent residential address. You may do this either by telephone or in writing (written evidence is preferred). You are likely to require the customer s authority before the employer or educational institution will release such information. When dealing with overseas customers you must always consider whether there is a legitimate reason for them to be undertaking transactions in this country and with yourself. If you cannot identify such reasons this is cause for suspicion and you must make an immediate report to the MLRO. 8.5 Cases Where Ordinary Verification Routes are Not Available There are a number of scenarios whereby customers might not be realistically expected to be able to produce verification of identity in accordance with the normal processes. Section 10 covers cases where UK residents do not have access to verification documentation and thus where Financial Exclusion rules may need to be used. 8.6 Special Verification Scenarios Private Customers This part of the chapter explains how to verify identity in circumstances where the normal processes are not relevant or would be difficult to apply. These are specifically policies for children, verifying third party schemes, the mentally incapacitated, asylum seekers & economic migrants Policies for Children & Students If you are arranging policies for children or students it is likely that they will not be able to provide the normal verification documentation. The rules and guidance allow for this, and provide slightly different procedures for these cases. For children a family member or guardian will normally open the account. In these cases evidence of the relevant adults should be obtained in the usual way. It is important to note that in many circumstances the person providing the funds might be different to the person who will be able to operate the account e.g. where a grandparent providing the funds for a policy in a child s name it will be the parent or legal guardian who would be mandated to deal with those funds until the child came of age. Accordingly more than one adult might need to be verified. As well as verifying the relevant adults, the child s identity should be evidenced by obtaining sight of their birth certificate, passport or NHS Medical Card. Obtaining evidence that their parents reside at the address can be used as evidence of the child s home address (using the normal documentation types). 6

7 As an exemption, for stakeholder and personal pensions only the child does not need to be verified until they attain age 18 and begin making contributions on their own account. Child Trust Fund Money Laundering Requirements The rules for verifying Child Trust Fund (CTF) accounts are different to other product verification requirements for the following reasons: the CTF is considered a low risk product; excluding the Inland Revenue (I.R.) payment the yearly contribution is limited to 1,200; the account cannot be accessed before the child reaches age 18 (except on death or terminal illness). The submission of the I.R. s voucher (or I.R. instruction to open a CTF) can be accepted as evidence of the child s identity. For each CTF there will be a Registered Contact (RC), which in most cases will be a parent. Under Money Laundering Regulations the RC may be regarded as an applicant for business. Therefore, the identity of the RC should be verified (in the normal way) to avoid any Regulatory breach. We understand that there is no necessity to verify the identity of third parties (possibly grandparents) who make payments into the CTF, however, where deposits, in excess of the maximum figure, are attempted you must consider whether it constitutes a suspicious activity. To evidence the address of students, where normal verification evidence is not available you may: verify them via the address of their parents/guardian, i.e. if they have evidence of residence at their parent or guardians address this will be sufficient; by obtaining confirmation of their UK address from their college or university; by obtaining sight of their tenancy agreement or student accommodation contract. Particular care should be taken at the commencement of the academic year, before the student has taken up residence at the student address, as it is known that criminals have used registration frauds at this time to gain access to financial services. You should seek guidance from the Money Laundering Reporting Officer if you believe that a student with whom you are dealing has not taken up residence at the verified address Third Party Schemes If an investor sets up a regular savings scheme, where the funds are supplied by the investor for investment in the name of another, e.g. a child or spouse or company investing in the name of a partner/director, identity verification of person/entity funding the premiums should be obtained as well as the legal owner. 7

8 You should note that law enforcement evidence suggests that child/spouse accounts are often used for tax evasion or other illegal purposes. Should you have any doubt about the legitimacy of such a transaction you should make an internal suspicion report The Mentally Incapacitated The affairs of people who are mentally incapacitated are generally handled in one of two ways. These being: 1. An enduring power of attorney is registered with the Court of Protection (registration happens at the point of the individual becoming mentally incapacitated). This gives the attorney power to manage the financial affairs. In all cases the Enduring Power of Attorney document should carry the stamp of the court of protection. In these cases you should verify the identity of the attorney and obtain sight of the stamped Power of Attorney document. 2. A receiver may be appointed by the court to act on behalf of the mentally incapacitated person: In these cases the Public Guardianship Office advises the receiver to open an account in their name as receiver for the customer. To do this they must be in receipt of either a courts receivership order or a short order from the court. In these instances the court documentation can be relied upon without obtaining further identification evidence Asylum seekers The identity of those seeking asylum, or who have recently been granted asylum, might be difficult to prove because they may not have the usual evidence of identity documentation. For those who are seeking asylum the Application Registration Card can be used to assist in verifying name, however, as much other evidence as possible should be obtained to support this. For those who have had asylum claims accepted the following proof of name documents could be used: Blue United Nations Convention Travel Documents, which are issued by the Home Office to people who have been accepted as refugees under the terms of the UN Convention 1951; Brown certificates of identity which are issued by the Home Office to people who have been granted exceptional leave to remain in the UK; A letter from the Home Office confirming they have been granted refugee status; A letter from the Home Office confirming they have been granted exceptional leave to remain. If you are ever called upon to provide a service to asylum seekers you should proceed with great care. You would not usually expect such individuals to be in a position to undertake significant financial transaction thus anything other than low value, simple business e.g. small term policies, membership of employers pension scheme should be reported to the MLRO. 8

9 8.6.5 Economic Migrants Economic migrants who enter the UK with permission to work will usually be able to present passport documentation to prove their identity. In some cases they may have, in addition or instead of a passport, a GV3 Visa form, which contains a photograph. This may be used as proof of identity and are most prevalent amongst Taiwanese immigrants and those who entered the UK as part of the agreement to close the Sangatte Red Cross centre in France. 9