guideline on anti-money laundering and the combating of terrorist ...

Guideline on Anti-Money Laundering and the Combating of Terrorist Financingthemselves as to the legitimacy of the organization 18 by, for example, requesting a copyof the constitution.Whilst it is not practical to obtain documentary evidence of identity of all donors,institutions, where possible financial institutions should undertake a basic level of duediligence of a foreign NPO’s donors in relation to known money laundering and terroristactivities.12.3.2. (v.) Non-face to face customersThe rapid growth of financial business by electronic means increases the scope for nonface-to-face business and increases the risk of criminal access to the financial system.Customers may use the internet, the mail service or alternative means because of theirconvenience or because they wish to avoid face-to-face contact. Consequently, specialattention should be paid to risks associated with new and developing technologies. Thedevelopment of technologies such as encryption, digital signatures, etc., and thedevelopment of new financial services and products, makes the Internet a dynamicenvironment offering significant business opportunities.The unregulated nature of the Internet is attractive to criminals, opening up alternativepossibilities for money laundering, and fraud. It is recognized that on-line transactionsand services are convenient. However, it is not appropriate that institutions should offeron-line live account opening allowing full immediate operation of the account in a waywhich would dispense with or bypass normal identification procedures. Initial applicationforms could be completed on-line and then followed up with appropriate identificationchecks.Financial institutions are required to pay special attention to any money launderingpatterns that may arise from new or developing technology that might favour anonymity;and be used to facilitate money laundering, and financial institutions must takeappropriate measures to treat with such patterns 19 .There should be policies in place or measures as may be needed to prevent the misuseof technological developments in money laundering or terrorist financing schemes.Institutions offering Internet-based and/or telephone products and services shouldensure that they have reliable and secure methods to verify the identity of theircustomers.18 For example, www.guidestar.org provides a list of all IRS recognized nonprofit organizations including charities; and www.charitycommission.gov.ukprovides a list of registered charities.19 Refer to the FOR, Regulation 23.Page 24 of 75