CDD - Identification and Verification Policy (VML002)

1. INTRODUCTION

Having sound CDD measures in place is vital to protect a law firm’s integrity and to reduce the likelihood of them becoming a vehicle for, or victim of, financial crime. Failure to do so can subject a firm to reputational, operational and client risk. These measures also constitute an essential part of risk management by providing the basis for identifying, limiting and controlling risk as well as assisting law enforcement by providing available information on applicants for business who may be under investigation by the JFCU.

 

2. REGULATORY REQUIREMENTS

The Money Laundering (Jersey) Order 2008 states that we must comply with the following measures to identify and verify any applicant for business, beneficial owners and controllers and third parties on whose behalf the applicant acts:

2.1. Apply identification and verification procedures before the establishment of a business relationship or one-off transaction.

2.2. Conduct on-going identification procedures throughout the course of a business relationship.

2.3. Where we become aware that the CDD previously obtained no longer meets current or additional requirements due to changing legislation or the profile of the client.

2.4. Terminate any business relationship where customer CDD procedures are not completed.

 

3. POLICY

In order to be compliant with the above regulations, Viberts has set the following policy in place:

3.1. Unless the client is a regulated company by the JFSC or equivalent regulator, all applicants for business including any beneficial owners and controllers of the applicant and any third parties on whose behalf the applicant acts, will be subjected to identification and verification procedures as
set out in the Procedure section below (except in those cases noted at 5.12 above).

3.2. If we are unable to establish ID and verification of any applicant for business under the usual procedures, we will terminate the relationship.

 

4. PROCEDURE

4.1. Risk Assessment

In the process of undertaking the risk assessment, AML/CFT risks such as the below must be considered:

• Country risk - is there suggestion of connection to a jurisdiction presenting higher risk of money laundering or financing of terrorism (NB. we do not engage with clients connected with enhanced risk states, notably Iran and North Korea).
• Service risk - does the nature of the matter present greater risk of money laundering or terrorist financing.
• Delivery risk - have we met the client in person. If not, what additional risks does that present and are there mitigations.
• Client risk - does their business/employment represent higher risks. Could they be a PEP or PEP by association. Could they be subject to sanctions. Does their behaviour cause concern. Do we understand why they have approached us. Is the client a personal asset holding vehicle. Do we understand the structure.

Once the Matter Risk Assessment form has been completed, we should consider the element of identity check that would be appropriate to the applicant for business:

4.1.1. Low risk clients - ID procedure is as follows:

• Standard ID procedures to be conducted in accordance with category of business defined in section 4.3.

4.1.2. Medium and high-risk clients - ID procedure is as follows:

• As well as the standard ID procedures set in section 4.2, enhanced CDD procedures should be applied as defined in the Enhanced CDD policy in appropriation to the type of risk involved.

4.2. Applicants for business and types of ID and verification required.

The following details the documentation required which should be attached to the appropriate ID form and forwarded to the Departmental Partner for approval:

4.2.1. Private Individuals - ID1A:

• Photographic identification i.e. current passport, driving licence or other photo ID containing date of birth or expiry date; and
• Proof of address i.e. utility bill, bank statement, local authority correspondence or letter of introduction from a regulated person which is no older than 3 months. Where the utility bill or statement is received by the client in electronic format, we must validate its
  authenticity. This could be achieved by the client forwarding the original email by which it was received, or our evidencing its production from the website. For bank statements, the relevant branch stamp and certification will also provide comfort to its authenticity.

NB. If client matter is opened in multiple names; ID should be obtained from all relevant parties.

4.2.2. Companies - Regulated Entities – Form ID1B:

• Print of regulated listing from JFSC (or equivalent in other jurisdiction) to be attached to form.

4.2.3. Companies - Non-regulated – Form ID1B:

• Names of persons having a senior management position.
• Memorandum and Articles of Association (or equivalent).
• Identification and verification of two principles of the business, such as a financial director or other senior official.
  • Where a director holds their position as a result of their employment by a
    regulated Jersey trust and company services provider we only need to obtain the
    full name of the director and confirmation from the provider the individual is an
    officer or employee.
• Identification and verification of any beneficial owners holding 25% or more of the shares or materially controlling the company by other means.

In addition to the above, one of the following should also be obtained:

• Certificate of incorporation/registration/licensing; or
• Latest audited financial statements.

For medium and higher risk clients, all items will be required.

NB. We do not accept companies as client where bearer shares are in issue.

NB. Please note the difference between registered companies and regulated companies within the JFSC website. Clients who are listed on company registries only, are not regulated by the JFSC and should be subjected to the standard identification procedures set out in section 4.2.3.

4.2.4. Trusts/Trustees - Non-regulated - Form ID1E:

• Identification and verification of the Settlor, Protector, Trustees and active beneficiaries (NB. identification of a deceased settlor is not required).
• Certified proof of registered address.
• Certified copies of trust instrument and any other supplemental instruments.

4.2.5. Partnerships - Non-regulated - Form ID1F:

• Identification and verification of the directors and partners who hold a 25% share/stake (to include any limited partners who participate in the management of the partnership).
  • Where a partner holds their position as a result of their employment by a regulated Jersey trust and company services provider we only need to obtain the full name of the partner and confirmation from the provider the individual is an officer or employee.
• Certified proof of registered address.
• Certified copies of partnership agreement.
• Certified copy of the certificate of registration (limited partnerships).
• Latest audited financial statements (if medium or high risk).

4.2.6. Foundations - Non-regulated - Form ID1G:

• Identification and verification of the directors and/or trustees.
  • Where a director/trustee holds their position as a result of their employment by a regulated Jersey trust and company services provider we only need to obtain the full name of the partner and confirmation from the provider the individual is an officer or employee.
• Certified proof of latest annual accounts.
• Certified copy of foundation charter.

4.2.7. Charities - Non-regulated - Form ID1H:

• Evidence of the online registration.
• Identification and verification of the directors and/or trustees.
• Certified copy of latest annual accounts.
• Certified copies of charity/foundation charter.
• See also Charities Policy (VML0006) below.

4.2.8. Third Party Agents and Beneficial Owners (non-regulated entities only) - Form ID1B

• ID and verification is required on all applicants for business as well as any beneficial owners of the applicant and any third parties on whose behalf the applicant acts (and any beneficial owners and controllers of third parties). We must also consider whether enhanced CDD is required; dependant on the risk assessment.

4.2.9. Non Face-to-Face ID and Verification - Forms ID1A or ID1B as well as ID1C

Sometimes, relationships will be established where there is no face to face contact with the individuals to be identified, e.g. where identification information is provided through a trustee, or by a company on the persons who are its beneficial owners and controllers, or an overseas client approaches us for probate or will purposes. In these instances, we must perform an additional check in relation to the level of risk involved using at least one of the following:

• Obtaining copies of identification documents certified by a suitable certifier. Suitable certifiers include:
  • Members of the judiciary, senior civil servants, or serving police or customs officers.
  • An officer of an embassy, consulate or high commission of the country issuing the identification document.
  • S member of a professional body that sets and enforces ethical standards.
  • Sn individual qualified to undertake certification services under the Certification and International Trade Committee.
  • A director, officer or manager of a regulated financial services business operating in a well-regulated country or territory.
  • The copy, including the image of the individual, must be clear and any text legible.
  • The certified must have seen the original document and the individual to whom it belongs
    by personal presentation.
  • The name, position or capacity and contact details of the certified must be provided and we should validate the credentials of the certifier.
• Requiring payment of funds to be drawn on an account in the client’s name at a bank that is regulated.
• Verifying additional aspects of identity or other CDD information from independent sources.

Reference should also be made to the Enhanced Due Diligence Policy (VML0003) and form ID1C completed.

4.2.10. Copy documentation provided by regulated trust and company services providers

Where our client is managed or administered by a trust and company services provider who is regulated by the JFSC, the Guernsey financial Services Commission or the Isle
of Man Financial Services Authority, we may use identification documentation of individuals which is a copy of the documentation obtained by the provider where the
following confirmations are also provided:

• The regulated trust and company services provider has seen the original document that it has copied to Viberts, or the document that has been copied to Viberts was provided to the regulate trust and company services provider by a suitable certifier.
• The regulated trust and company services provider is satisfied that the original document seen, or document provided to it by a suitable certifier, provides evidence that he individual is who they are said to be and
• the document provided to Viberts is a true copy of a document that is held by the regulated trust and company services provider.

We should check that the documentation provided is current and consistent with our knowledge of the principals involved, e.g. the passport/driving licence is in date and the
address aligns with our understanding.

4.2.11. Politically Exposed Persons (definition on CDD form) - Forms ID1A or ID1B as well as ID1C

Standard ID procedures apply as for an individual or company as well as enhanced CDD for PEPs as defined in the Enhanced CDD Policy.

4.3. Ongoing Monitoring of ID The MLO requires some element of on-going monitoring of CDD. Our policy and procedure on this is as follows:

• A recompletion of full CDD process is required on any open and active matter where it is longer than three years since the client instructed us.
• A new ID document if the previous one has expired.
• Evidence of address (by an online check or up to date utility bill should be refreshed where there is any doubt as the clients up to date details.
• Ensure that all current instructions are consistent with the clients profile.
• On-going awareness to ensure that we are not being compromised by having dealings in any acquisitive crime by or involving that client.
• The same applies if a client approaches for a new matter. Risk assessment and CDD forms should be freshly completed and ID verification documents updated as detailed above. If the documents we hold remain valid, they should be copied across and a note made of their original source.

4.4. Exceptions from CDD Procedures

ID procedures are not required for any of the following:

• A person whose identity is verified as being a public authority and is acting in that capacity (where acting for a third party, the third party must still be identified and the authority to act verified).
• A business relationship that relates to a pension, superannuation or similar scheme.
• A body corporate whose securities are listed on a regulated market or on a market that conforms to international standards set by IOSCO, including subsidiaries and beneficial owners and controllers.
• A regulated entity or person who carries on equivalent business to any category of equivalent business. Any third parties represented by the regulated person must be identified in accordance with the ID procedures.

Any problems in obtaining CDD compliant with the above must be referred to the Head of Risk and Compliance.

Exceptions to these requirements (excluding 4.4) can only be sanctioned by the MLCO.