The Final Rule – 2018

19/08/19 – 30 Minutes away from the Kennedy Space Centre in Florida – USA.
Customer Due Diligence (CDD) – FINAL RULE – Regulatory expectations & action by Financial Institutions like Banks.

In another earlier write-up I alluded to the Banking mandatory Requirement of conducting Customer Due Diligence (CDD). For practical purpose and simplification, CDD was said to be a deliberate but elaborate process where Financial Institutions such as Banks, Insurance Companies, Securities and Brokering firms collect, maintain, periodically review and update information and data about their individual clients, corporate, commercial and Institutional customers. Customer Due Diligence (CDD) process was also said to be a Legal and Regulatory requirement in most Jurisdictions (Countries, Nations and States) to allow an informed choice to be made whether to on-board a new customer, continue with an existing customer relationship, or provide a new product or service or in worst case scenario, deny/reject the service and exit the relationship and close the Client’s or Bank account. (Oh, yes, if you keep on robbing people, Companies and Banks at gun point, Officially abuse your Official position, solicit for and receive bribes from individuals and Companies or plunder the National coffers and want to haul the loot all the way to the Bank, the Banks reserve the Legal right not to only refuse your dirty money, or to take your criminal proceeds (cash, check or transfer, Certificate of Title for your 48 houses) if the Officials become aware of your financial criminal activities and conduct, but legally obligated to formally file Suspicious Activities Reports (SARs) to the FIC or any appropriate Law Enforcement Officers. It has been noted that CDD is also one of the most powerful and available tools for all Financial Institutions to prevent and deter financial criminals and terrorist financiers from using the banks as conduits to conduct their illegal activities including those who are involved in money laundering activities.

KINDLY TAKE NOTE: As of May 11th 2018, the Customer Due Diligence (CDD) added new CDD – FINAL RULE: This is a Requirement that Financial Institutions (Banks, Brokers) must collect and verify the personal Information of the real People (Beneficial Owners) who own, control and profit from Companies when those Companies open Bank Accounts. This requirement is designed to enhance financial transparency and safeguard the Financial System against illicit use. This is a 2 Pronged approach.

CONTROL PRONG: An Individual with significant responsibility to control, manage and direct a legal entity customer, including the Managing Director and Chief Executive Officer (MD/CEO) must be identified and verified.

OWNERSHIP PRONG: Each Individual, who directly or indirectly, through any contract, arrangement, understanding, or relationship own 25% or more of the Equity Interests or Shares of a Legal entity customer (Company, Firm, Corporate) must be identified – at least up to 4 such individuals.

Essentially, the Offshore Account holders and those appearing in Panama Papers can clearly be identified and or investigated.
Equally important is the realization that in order for Banks and other Financial Institutions to assist Government to fight the funding of Terrorism Financing and Money Laundering Activities most National and Federal Laws require that all Financial Institutions must obtain, verify and record information that identifies each person who opens an account.

In a lay man/woman’s language, what this means is that when you open Bank account, the Bank will ask you for YOWA Names, Physical and Mailing addresses, Date of Birth, and other Information that allows the Bank to identify you such as the National Registration Card (NRC), Passport, or Driving Licences. (Those Documents MUST not be Forged or Manufactured from Matero as knowingly uttering a Forged Document is a serious criminal offence, in addition to perjury, forgery and impersonation). Have a nice week and stay blessed.

Published by Kunda Kalaba

Financial Crime Compliance (FCC) professional. Passionate about AML/CTF, Sanctions, ABC, KYC, CDD. Member - World Advisory Council Association of Certified Fraud Examiners-ACFE. Member of the African Task Force Committee - ACAMS. Presenter at International Conferences-ACAMS&ACFE. Certified Fraud Examiner-CFE. ACFE & ACAMS Singapore Chapters Member. Certified Anti-Money Laundering Specialist-CAMS. Certified Anti-Bribery and Corruption-ABC. Chairperson, ABC Working Group. Founder - Institute of Directors (IoD) Zambia Chapter. Founder - Managerial Accountability & Transparency. Two-term of two years Chairperson of the Bankers Association of Zambia Fraud Prevention and Security Committee. Zambian Government to SADC and COMESA Consultant on Crime & Corruption Prevention & management Strategies. Sound & vast experience in FCC Compliance, Deterrence, Prevention, Detection, Investigations, Security and Prosecutions. 25 years extensive experience in FCC, ABC, AML, CTF, Fraud & Operational risk assessment & Investigations. STA in Financial Crime Compliance & Risk management in London, Coventry & Southampton in the UK. Area Head of FCC for Southern & East Africa responsible for Risk Assessments & Investigations, AML/CTF, Sanctions. Central Bank regulatory and AML Directives appointed as Country Money Laundering Prevention/Reporting Officer-CMLPO. Professionally trained “trainer of trainers” & core facilitator. Proficient with proven track record of exceptional abilities in management and leadership for performance. Corporate Governance, capacity building, Institutional & Organizational development, business process re-engineering. Technical expertise is coupled with excellent interpersonal, team building, communication and presentation skills.

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