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Guideline on Anti-Money Laundering and the Combating of Terrorist Financingc) Where a financial institution acquires the business of another regulated entity, whether in Trinidad andTobago or elsewhere, and it is satisfied that the due diligence standards of the acquired institution areat least equivalent to that set in this Guideline, it need not re-verify the customers.13.2 If the financial institution is not satisfied that equivalent standards have been followed, it should seek toidentify and verify the identity of customers who do not have existing relationships with the financialinstitution.13.3 Regulations 14 and 29 of the FOR outline certain circumstances where documentary evidence of identity isnot required. Such circumstances include:-a) where a financial institution carries out a one-off transaction with a third party following an introductionby a person who has provided a written assurance that the identity of the third party introduced by himhas been obtained.b) in the case of a pension scheme taken out with the person’s employer and where contributions to thescheme are made via deductions from wages and assignment of a member’s interest is not permittedunder the scheme.c) where there is a contract of long-term insurance or where a contract of insurance has no surrenderclause and may not be used as collateral for a loan.13.4 Additionally, documentary evidence of identification may not be required in the case of exempt customersuch as:-a) any central or local government agency or statutory body;b) a publicly traded company or investment fund listed on the Trinidad and Tobago Stock Exchange or anyother stock exchange specified by the Central Bank where there is no shareholder with 10 percent ormore of the shares of the company 27 ;c) financial institutions regulated by the Central Bank, or the Trinidad and Tobago Securities andExchange Commission; andd) foreign financial institutions regulated by a Central Bank or equivalent supervisory authority in ajurisdiction that adequately complies with the FATF 40 + 9 Recommendations on AML/ CTF 28 .14. RETROSPECTIVE DUE DILIGENCE14.1 Regulation 37 of the FOR requires a financial institution to conduct retrospective due diligence on allexisting accounts. Where the identity information held on existing customers does not comply with the27 Refer to the FOR, Regulation 16(2)(c ).28 Refer to FATF Public Statement on jurisdictions with strategic AML/CTF deficiencies at www.fatf.org.Page 35 of 75
Guideline on Anti-Money Laundering and the Combating of Terrorist Financingrequirements of relevant AML/ CTF legislation and this Guideline, financial institutions are required todevelop a risk-based programme for ensuring compliance. Financial institutions should therefore:-a) record their non-compliant business relationships, noting what information or documentation is missing;b) establish a framework for effecting retrospective due diligence, including the setting of deadlines for thecompletion of each risk category. The timing of retrofitting can be linked to the occurrence of asignificant transaction, a material change in the way that an account is operating, or doubts aboutpreviously obtained customer due diligence data; andc) establish policies for coping with an inability to obtain information and documentation, includingterminating the relationship and making a suspicious report.14.2 Where a financial institution deems on the basis of risk and materiality, that it is not practical to retrofit acustomer (e.g. the settlor has died; the account is inactive or dormant), exemption of such accounts shouldbe approved by the Compliance Officer and senior management, reported to the board and a note placedon the individual’s file .15. PRE-EMPLOYMENT BACKGROUND SCREENING KNOW YOUR EMPLOYEE (KYE)15.1 In addition to establishing and implementing CDD policies and procedures, every financial institution shallutilize best practices of the industry, to determine its staff recruitment policy, to attract and retain staff of thehighest levels of integrity and competence 29 . The ability to implement an effective AML/ CTF programmedepends in part on the quality and integrity of staff.15.2 Consequently, financial institutions should undertake due diligence on prospective staff members. Thefinancial institution should:a) verify the applicant’s identity;b) develop a risk-focussed approach to determining when pre-employment background screening isconsidered appropriate or when the level of screening should be increased, based upon the positionand responsibilities associated with a particular position. The sensitivity of the position or the accesslevel of an individual staff member may warrant additional background screening, which should includeverification of references, experience, education and professional qualifications;c) maintain an ongoing approach to screening for specific positions, as circumstances change, or for acomprehensive review of departmental staff over a period of time. Internal policies and proceduresshould be in place (e.g. codes for conduct, ethics, conflicts of interest) for assessing staff; andd) have a policy that addresses appropriate actions when pre-employment or subsequent due diligencedetects information contrary to what the applicant or employee provided.29 Refer to the FOR, Regulation 5.Page 36 of 75
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