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Guideline on Anti-Money Laundering and the Combating of Terrorist Financing8.2 Financial institutions’ compliance programmes must be risk-based and appropriate for the size, complexity andrisk of the institution. This means that it is expected that where possible financial institutions will consider,adopt and adapt the requirements to appropriately reflect the AML/CTF vulnerabilities identified by theinstitutions in terms of its clients, products, markets etc.9. CUSTOMER DUE DILIGENCE AND IDENTIFICATION PROCEDURES9.1 Regulation 11(1) of the FOR outlines the circumstances under which a financial institution should conductcustomer due diligence (CDD) including the verification of customer identity. Such instances include:-a) when establishing a business relationship;b) for one-off transactions or occasional transactions of value TT$90,000 or more;c) for two or more one-off transactions which together total TT$90,000 or more and which appear to belinked;d) for one-off wire transfers of TT$6,000 or more; ande) for two or more one-off wire transfers which appear linked and which in total amount to TT$6,000 or more.9.2 Notwithstanding the thresholds established in law, financial institutions may establish lower reportingthresholds that are commensurate with the size of transactions that are typically conducted at the institution.9.3 The verification of the source of funds is not normally required in the case of:a) a one- off transaction or occasional transaction of less than TT$90,000, or TT$6,000 8 in the case of aone-off wire transfer;b) two or more one-off transactions which appear to be linked but which together total less than TT$90,000;orc) two or more one-off wire transfers which appear linked but which total less than TT$6,000.Irrespective of the size of the transaction however, any suspicions of money laundering or terrorist financingmust be reported to the FIU.9.4 Financial institutions should assess the potential risk inherent in each new client relationship prior toestablishing a business relationship. This assessment should take account of whether and to what extent acustomer may expose the institution to risk, and of the product or facility to be used by the customer. Based8 A money remittance company which typically engages in wire transfer will be expected to use the TT$6,000 threshold or such lowerthreshold as the company has established based on the usual value of business transactions conducted.Page 11 of 75
Guideline on Anti-Money Laundering and the Combating of Terrorist Financingon this assessment, the institution should decide whether or not to establish, or continue, a relationship withthe customer.9.5 Prior to establishing a business relationship, the onus is on the financial institution to verify the customer’sidentity. The customer’s physical identity should be verified using at least one form of picture identification 9,which may be a valid passport, national identification card or driver’s license. Additional picture identificationmay be requested by the financial institution as part of its enhanced due diligence efforts.9.5.1 When commencing a business relationship, institutions should record the purpose and reason forestablishing the business relationship, and the anticipated level and nature of activity to be undertaken.The extent of documentary evidence required will depend on the applicant and the nature of theapplicant’s business. Documentation confirming the nature of the applicant’s business (e.g. auditedfinancial statements) or the applicant’s occupation (e.g. job letter or last pay slip) should also includethe origin or source of funds to be used during the relationship.9.5.2 Once a business relationship has been established, reasonable steps should be taken by the institutionto ensure that due diligence information is kept up to date. For example, financial institutions shouldupdate customer records as appropriate or at least upon occurrence of a material change to thebusiness relationship (e.g. change of employment, marital status, address etc.). In addition, it isrecommended that records for high risk customers are updated at least annually.9.5.3. When considering whether to enter into a business relationship, reasonable measures should be takento obtain sufficient information to distinguish those cases in which a business relationship iscommenced or a transaction is conducted with a person acting on behalf of others, in the case of arepresentative applicant, trustee or nominee.9.5.4 Where a prospective client fails or is unable to provide adequate evidence of identity or incircumstances in which the institution is not satisfied that the transaction for which it is or may beinvolved is legitimate, an explanation should be sought and a decision made by the Compliance Officeras to whether:-a) it is appropriate to proceed with the business relationship; orb) the other measures that should be taken to verify the client’s identity; andc) whether or not a report to the FIU should be made.9.5.5 The identification requirements for establishing a relationship with an individual or a business client areoutlined in Regulations 15 and 16, respectively of the FOR.9 Refer to the FOR, Regulation 15(2).Page 12 of 75
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