(AML-CFT Decision Articles 4.3, 5.1(a)-(c), 10, 11.1(b), 13.2)
From time to time, certain situations may arise which fall outside of the normal course of CDD processes. Under these circumstances, described below, FIs are permitted to handle the timing, customer identification, and other aspects of customer due diligence procedures exceptionally. Specifically:
| • | When there is no ML/FT suspicion, and the ML/FT risks are identified as low, FIs may complete the verification of the customer’s identity after establishing the Business Relationship under the conditions specified in the relevant provisions of the AML-CFT Decision. In such circumstances, the verification of the identity must be conducted in a timely fashion, and FIs must ensure that they implement appropriate and effective measures to manage and mitigate the risks of crime and of the customer benefiting from the Business Relationship prior to the completion of the verification process. Examples of such measures which FIs may consider taking in this regard are, among others:
| - | Holding funds in suspense or in escrow until the verification of the identity is completed; | | - | Making the completion of the verification of the identity a condition precedent to the closing of a transaction.
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| • | In the case of Legal Arrangements, such as Trusts or foundations, or of life insurance policies (including funds-generating transactions, such as life insurance products relating to investments and family Takaful insurance) in which there are beneficiaries who are not named, but instead belong to a designated class of future or contingent beneficiaries, FIs are required to obtain sufficient information about the details of the class of beneficiaries so as to be in a position to establish the identity of each beneficiary at the time of the settlement, pay-out, or exercise of their legally acquired rights. Furthermore, FIs must verify the identity of the beneficiaries at the time of settlement or pay-out and prior to the exercise of any related legally acquired rights. They should also ensure that they implement appropriate and effective measures to manage and mitigate the risks of crime and of the customer benefiting from the Business Relationship prior to the completion of the verification process. Examples of such measures which FIs may consider taking in this regard are, among others:
| - | Holding funds in suspense or in escrow until the verification of the identity is completed; | | - | Making the completion of the verification of the identity a condition precedent to the closing of a transaction.
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| • | When a legal entity customer or its controlling stakeholder meets the conditions specified in Article 10.1-2 of the AML-CFT Decision with regard to publicly listed companies (including the condition that information concerning the identity of the shareholders, partners, or Beneficial Owners with an interest of 25% or more is available from reliable sources), FIs are exempted from taking the normally required identity verification measures. In this regard, FIs should ensure that the disclosure and transparency requirements of the regulated stock exchange are at least equivalent to those of the State, and should document the evidence they obtain concerning the relevant disclosure and transparency requirements.
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| | It is important to note that, while FIs are exempted in such situations from identifying and verifying the identity of the shareholders, partners or Beneficial Owners (or in the event that no such person can be identified, of the relevant senior management officers), they are not exempted from ascertaining the identity of senior management.
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| | Examples of reliable information sources in this regard include, but are not limited to:
| - | Stock exchange disclosure reports or websites; | | - | Corporate annual reports, websites, or other forms of official public disclosure; | | - | Official or public registries; | | - | Credit reporting agencies; | | - | Recognized, well-established media outlets.
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| • | When FIs suspect that a customer or Beneficial Owner is involved in the commitment of a crime related to money laundering, the financing of terrorism, or the financing of illegal organisations, and they have reasonable grounds to believe that undertaking customer due diligence measures would tip off the customer, then they should not apply CDD measures, but should instead report their suspicion to the FIU along with the reasons that prevented them from carrying out the CDD measures.
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