What documents do I request during an AML check?

Misunderstanding  

A misunderstanding sometimes arises during the identification of a new client. Some lawyers think that identification only applies to AML files. This is not true. As a lawyer, you should always identify your (potential) client. Also, every client should be screened against sanction lists.   

Below is a list of all the necessary information to complete the identification as soon as possible. As you can see from the list below, identifying a legal entity takes things a bit further than that of a natural person. This has to do with complexity, possible shareholders, and ultimate beneficial owners (UBOs). 

Required information

Natural person

• Name
• Address
• Copy of ID
• PEP-statement

Legal entity 

• Extract Chamber of Commerce 
• Structure chart of the shareholders 
• Representative 
  • Name
  • Copy of ID
  • Power of attorney

• UBO
  • Name 
  • Address 
  • Copy of ID 
    
• PEP-statement

The organisational chart of the shareholder structure should be detailed down to the ultimate stakeholders, the UBOs. Do not forget to include the share percentages. Also request the name and address details of the authorised persons, including a copy of identification. Note: it is not just a matter of identifying someone. You also need to verify that all details are correct. 

In addition, in the case of a legal entity, it is important for AML files that you have a PEP (Politically Exposed Person) statement from the persons involved. If you do not use AML software, a PEP statement must be completed and submitted. Often, this statement is included on the UBO form. 

Tip: AML software

If you perform client identification and verification manually, you are likely to run into challenges when screening sanction lists and high-risk countries. It is almost impossible to screen all persons manually. The national sanctions list is manageable, but searching the European list requires more work. However, you are obliged to do it since – in all matters you do - in principle you are not allowed to engage in business with sanctioned individuals.   

AML-software offers a solution. The sanctions lists are automatically checked and an identification link from the software can be sent to the client so that they can enter their personal details and you don't have to ask the unpleasant questions for the client identification.

Furthermore, you will be notified if you are missing documents or important client information. Some fields in the client file are mandatory. The client cannot continue without uploading existing documents. In this way, nothing is forgotten, not even the mandatory check of sanctions lists and risk countries.

Role of the supervisor 

During an inspection, the supervisor takes a critical look at whether the file is complete. The penalty structure means that, for each item missing from the file, you can be fined. Moreover, just showing the mandatory documents is not enough. You have to write a short assessment with each file, called the risk profile. More on that in a future blog post.   

To conclude: with RegLab, you have easy access to the audit trail. Very useful during a supervisor visit. You can show exactly who, what, when and which actions were carried out within the file. Because this makes the audit run more smoothly, you have a completely different conversation with the supervisor. You are always ten points ahead if you can quickly show how compliant you are.