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Client Due Diligence – Guide for Trust / Foundation

What CDD you need to provide to Viberts

What is Client Due Diligence?

In many jurisdictions, including Jersey, legislation has been introduced that requires firms when taking on clients or handling client business to have procedures in place to verify a client’s identity and their source of funds, this is called Client Due Diligence (CDD). Viberts is regulated by the Jersey Law Society and registered with the Jersey Financial Services Commission (JFSC). This requires us to gather certain information and obtain copies of certain documents to prove the identity of our clients. This is also required to comply with anti-money laundering legislation.

We are aware that due diligence requirements are not easy to understand so we have produced this guide to assist you. If you require any further help, please do not hesitate to contact us.


SECTION 1: CDD for a Trust

What information/documentation you will need to provide us:

  1. If we are instructed to carry out work on behalf of a trust the JFSC requires that we collect the following information:
    • Name of trust;
    • Mailing address of trustee(s);
    • Date of establishment;
    • Official identification number (e.g. tax identification number or registered charity or non-profit organisation number);
    • Mailing address of trustee(s);
    • Appointment of the trustee;
    • Nature of the trustee’s duties.
  2. To verify the above information, and also that any person purporting to act as the trustee has the authority to do so, we need to obtain the following evidence (i.e. documents via post):
    • Copy of the trust instrument (or those parts of the trust instrument which detail the above).
  3. We may request from the trustee the identity(ies) of:

    • The settlor of the trust,
    • Any person who subsequently settles funds and property into the trust;
    • A protector; and
    • Any other person exercising ultimate effective control over the trust;
    • the identity of persons having a beneficial interest in a trust where it becomes known the identified beneficiary presents a high risk.

If any of the above are individuals, their identity should be verified by obtaining the same documentation for an individual, please see our Guide here.

In any case where a settlor, protector, beneficiary, etc, is not an individual (i.e. a company), we can demonstrate that we have identified each beneficial owner or controller (under Article 3(2)(b)(iii)(C) of the Money Laundering Order) where we have identified:

  • Each entity with a material controlling ownership interest in the capital of the trust (through direct or indirect holdings of interests or voting rights) or who exerts control through other ownership means.
  • To the extent that there is doubt as to whether the individuals exercising control through ownership are beneficial owners, or where no individual exerts control through ownership, any other individual exercising control over the person through other means.
  • Where no individual is otherwise identified under this section, individuals who exercise control of the person through positions held (who have and exercise strategic decision-taking powers or have and exercise executive control through senior management positions).

For lower-risk relationships, a general threshold of 25% is considered to indicate a material controlling ownership interest in capital, and therefore someone we should hold CDD for. Where the distribution of interests is uneven, the percentage where effective control may be exercised (a material interest) may be less than 25% when the distribution of other interests is taken into account.


SECTION 2: CDD for a Foundation

What information/documentation you will need to provide us:

  1. If our client is a foundation (under Article 3(2)(a) of the Money Laundering Order), the JFSC requires that we collect the following information:
    • Name of foundation;
    • Date and country of incorporation;
    • Official identification number;
    • Business address. In the case of a foundation incorporated under the Foundations (Jersey) Law 2009, this will be the business address of the qualified member of the council;
    • Mailing address (if different);
    • Principal place of business/operations (if different);
    • Names of all council members and, if any decision requires the approval of any other person, the name of that person.
  2. To verify the above information, we need to obtain the following evidence (i.e. documents via post) – one is acceptable for lower risk clients:
    • Charter (or equivalent) or copy of such a charter certified by a suitable certifier;
    • Latest audited financial statements or a copy of such statements certified by a suitable certifier.
  3. We also need to collect information regarding the identity of the foundation’s beneficial owners and controllers (under Article 3(2)(c)(iii) of the Money Laundering Order):

    • The founder, a person (other than the founder of the foundation) who has endowed the foundation (directly or indirectly), and, if any rights a founder of the foundation had in respect of the foundation and its assets have been assigned to some other person, that person,
    • The guardian (who takes such steps as are reasonable to ensure that the council of the foundation carries out its functions);
    • Any beneficiary entitled to a benefit under the foundation in accordance with the charter or the regulations of the foundation;
    • Any other beneficiary and person in whose favour the council may exercise discretion under the foundation in accordance with its charter or regulations and that have been identified as presenting higher risk;
    • Any other person exercising ultimate effective control over the foundation.

In any case, where a founder, guardian, beneficiary or other person is not an individual, the same rules applicable to trusts (see the Trusts section above) concerning beneficial owners or controllers also applies to foundations.

The CDD guidelines above are a minimum requirement, and in some cases, we may be required to ask you for additional CDD information before we can process your matter.

 

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Additional Notes: 

Certified copies of documents may be certified by: – 

  • a member of the judiciary, a senior civil servant, or a serving police or customs officer;
  • an officer of an embassy, consulate or high commission of the country of issue of the documentary evidence of identity;
  • an individual who is a member of a professional body that sets and enforces ethical standards (i.e. an accountant);
  • an individual that is qualified to undertake certification services (i.e. a notary public or a lawyer);
  • a director, officer or manager within a financial services business which is regulated and operates in a well-regulated country or territory (i.e. a bank manager).

The person must certify that the copy is a true copy of the original document and a true likeness in the case of a photograph. In addition, the certifier must include an adequate level of information which needs to include their name, position or capacity, their address and telephone number or email address at which they can be contacted.

Until such time as we have received all necessary supporting CDD documentation from you, we will not be able to progress your matter/transaction or accept funds into our client account. 

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