ING DIRECT Customer Identification Procedures ... - Introducer Online

ING DIRECT Customer Identification Procedures for Brokers
Managing obligations of the Anti-Money Laundering and
Counter-Terrorism Financing Act (“AML/CTF Act”) for the
purpose of Customer Identification Procedures carried out as
an agent of ING DIRECT.
ING DIRECT is a division of ING Bank (Australia) Ltd ABN 24 000 893 292
December 2007

CONTENTS
1 Glossary of Terms .............................................................................................................. 3
2 Introduction......................................................................................................................... 4
2.1 Responsibilities of agents of ING DIRECT ................................................................. 4
2.2 AML/CTF Act............................................................................................................... 4
2.3 ING DIRECT Introducer Agreement ........................................................................... 4
2.4 Purpose of this manual ............................................................................................... 4
3 Application Process............................................................................................................ 6
3.1 Broker conducts face-to-face identification................................................................. 6
3.2 Broker assesses product and jurisdiction risk............................................................. 6
3.2.1 Product Risk......................................................................................................... 7
3.2.2 Jurisdiction Risk ................................................................................................... 8
3.3 Conduct Standard Identification and Verification........................................................ 8
3.3.1 Individuals ............................................................................................................ 8
3.3.2 Companies........................................................................................................... 9
3.3.3 Trusts ................................................................................................................. 10
3.4 Conduct Enhanced Identification and Verification .................................................... 10
3.4.1 Broker assesses customer risk as higher than standard................................... 11
3.4.2 ING DIRECT assesses customer risk as higher than standard......................... 11
3.5 Submit loan application, Identification Form and copies of identification ................. 12
4 Training............................................................................................................................. 12
4.1 Initial .......................................................................................................................... 12
4.1.1 MFAA Training ................................................................................................... 12
4.1.2 FBAA Training.................................................................................................... 12
4.1.3 New Brokers ...................................................................................................... 12
4.2 Frequency of training ................................................................................................ 13
4.3 Screening .................................................................................................................. 13
5 Record Keeping................................................................................................................ 13
6 Suspicious Matter Reporting ............................................................................................ 13
6.1 Guidelines to trigger suspicions ................................................................................ 14
6.2 Tipping off.................................................................................................................. 14
7 Where do I go to get clarification on an AML/CTF question? .......................................... 14
8 References ....................................................................................................................... 15
9 Appendix A: Identification Form ....................................................................................... 16
ING DIRECT Customer Identification Procedures for Brokers 2

1 Glossary of Terms
Term
Accredited Introducer
AML/CTF Act 2006
Identification
Identification Form
MFAA
Money Laundering
Politically Exposed
Person (PEP)
Reporting Entity
Terrorism Financing
Verification
Meaning
An introducer who has been accredited with ING DIRECT to
introduce home loan customers.
The Anti-Money Laundering and Counter-Terrorism Financing Act,
which was passed in 2006 and which is being implemented under
a staggered implementation regime.
A process to collect information from a customer that assists in
understanding who they are.
The new form released by ING DIRECT which outlines the
procedure for brokers to follow to appropriately identify and verify
potential customers who are individuals. This form (at Appendix A)
must be completed before a loan can be approved.
Mortgage & Finance Association of Australia
Money Laundering (ML) is the processing of criminal profits to
disguise their illegal origin. Money laundering can be used to hide
the proceeds of serious crime such as drugs trafficking, weapons
dealing and people smuggling or other less serious crimes such as
tax evasion and fraud.
A politically exposed person is an individual who has been
entrusted with prominent public functions in a foreign country, for
example Heads of State or of Government, senior politicians,
senior government, judicial or military officials, senior executives of
state owned corporations, important political party officials. The
definition may also extend to family members or close associates
of politically exposed persons. This definition is not intended to
cover middle ranking or junior individuals in the above mentioned
categories.
A business that is captured by the Anti-Money Laundering and
Counter-Terrorism Financing Act 2006 as they offer one of the
described designated services.
Includes the financing of terrorist acts, and of terrorists and
terrorist organisations. Financial Institutions already have legal
obligations preventing us from dealing in any way, with known
terrorists.
A process to verify the identification information provided by a
customer, traditionally undertaken through the collection of
identification documents but can also be done through electronic
data.
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2 Introduction
The AML/CTF Act 2006 imposes various obligations on Reporting Entities such as ING
DIRECT including to identify, manage and mitigate the money laundering and terrorist
financing risk that ING DIRECT may reasonably face in relation to the provision of designated
services to its customers.
2.1 Responsibilities of agents of ING DIRECT
As an accredited introducer of ING DIRECT, you are authorised to perform customer
identification under the AML/CTF Act on our behalf as our agent, on the basis that you do so
in accordance with the procedures set out in this document and any other relevant
procedures specified by ING DIRECT.
2.2 AML/CTF Act
Section 37 of the AML/CTF Act states that a reporting entity may authorise another person to
be its agent for the purposes of carrying out customer identification procedures on its behalf.
As a result a reporting entity may authorise a person to be its agent for the purposes of
carrying out the applicable customer identification procedure in respect of the customer on the
reporting entity’s behalf.
2.3 ING DIRECT Introducer Agreement
Clause 3.1(d)(iii) of the Introducer Agreement states:
The Introducer must comply with any guide, policy or code issued by ING DIRECT and
provided to the Introducer or any relevant industry body
Clause 3.3 of the Introducer Agreement states:
The Introducer must introduce customers in accordance with procedures specified by ING
from time to time.
Clause 3.5 of the Introducer Agreement states:
The Introducer and each of its agents and intermediaries must undergo such training as ING
DIRECT may from time to time reasonably require.
Clause 3.13 of the Introducer Agreement states:
The Introducer and anyone authorised by the Introducer is appointed ING's limited agent for
the purposes of obtaining proper customer identification in accordance with all applicable laws
(including, but not limited to, the Financial Transaction Reports Act).
Clause 3.15 of the Introducer Agreement states:-
The Introducer must properly identify each applicant. Without limitation, the Introducer must
comply with the procedures specified in Schedule 2.
2.4 Purpose of this manual
The purpose of this manual is to:
a) Set out revised procedures under the Introducer Agreement that you must comply with for
the purposes of compliance with the AML/CTF Act;
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) Specify training that the Introducer and each of its agents and intermediaries must
undergo.
The procedures including revised customer identification procedures apply to all customers
introduced to ING DIRECT on and after 12 December 2007.
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3 Application Process
The following diagram represents the customer identification process to be undertaken by the
Broker on behalf of ING DIRECT. Each numbered section of this diagram is explained in
further detail throughout this guide.
Customer wishes
to apply for ING
DIRECT home loan
1. Broker
conducts face
to face
identification
2. Broker
assesses
product and
jurisdiction risk
Based on industry
MFAA training
Does the customer
present a higher
risk?
Yes
4. Conduct
enhanced
identification
and verification
No
3. Conduct
standard
identification
and verification
5. Submit loan application,
identification form and copies of all
identification to ING DIRECT
Upon receipt of the application,
ING DIRECT will assess
customer risk and may request
additional information
Any suspicious matters should be escalated to ING DIRECT Financial Crimes immediately
3.1 Broker conducts face-to-face identification
All customers must be identified and verified in person. Only the accredited introducer may
conduct the identification.
3.2 Broker assesses product and jurisdiction risk
ING DIRECT has assisted in the development of the Mortgage and Finance Industry (MFAA)
AML/CTF training and accreditation package. One of the key tasks within this accreditation
process is developing an understanding of the risk-based approach. The risk-based approach
ING DIRECT Customer Identification Procedures for Brokers 6

is a principle adopted in the legislation that permits a Reporting Entity to tailor their
procedures based on the risk introduced by different:
- customer types;
- products;
- channels of delivery; and
- jurisdictions (eg of the customer, product, service, reporting entity or transactions)
In order to assess the risk of the customer for the purposes of identification, you should
consider two of the four factors above, product and jurisdiction.
For the purposes of introducing a home loan customer to ING DIRECT, the broker only needs
to consider product and jurisdiction risk. Upon receipt of the application, ING DIRECT will
assess the customer risk and determine if additional customer due diligence is required.
3.2.1 Product Risk
As described in the MFAA training package, the following table outlines the product risk
associated with different product types in the mortgage lending industry. Should the customer
be applying for any product in the standard risk category, apply the standard customer
identification procedure. At this stage, ING DIRECT does not offer products that are higher
risk.
Standard Risk Higher Risk
- Standard Variable Rate Residential
Mortgage
- Letter of Credit
- Equity Release Mortgage - Pre-shipment finance
- Standard Fixed Rate Residential
Mortgage
- Standard Capped/Floored/Belted
Residential Mortgage
- Equity Finance / Shared Appreciation
Mortgage
- Residential Mortgage with tied credit
card facility
- Novated lease (vehicle)
- Bank Guarantee
- Business Loan
- Construction Loan
- Offset Residential Mortgage
- Chattel mortgage
- Hire Purchase
- Novated lease (property)
- Partnership commercial loan
- Reverse Novation
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Standard Risk Higher Risk
- Commercial Overdraft
- Lo-doc Residential Mortgage*
- Commercial Line of Credit
3.2.2 Jurisdiction Risk
The following factors should be considered in determining if the customer presents a higher
than normal jurisdictional risk:
- Customer is not located in Australia
- Asset purchased with the loan is not located in Australia
In the event a factor above is evident during the risk assessment, a higher standard of
identification and verification is required. Refer to Section 3.4 below for enhanced customer
verification requirements.
3.3 Conduct Standard Identification and Verification
Standard identification procedures are different depending on the customer type. ING
DIRECT deals with the following customer types:
- Individuals
- Companies
- Trusts
3.3.1 Individuals
3.3.1.1 Identification
For the purposes of identification under the AML/CTF Act, a customer’s application for a loan
can not proceed unless at a minimum, the following information is provided for each loan
applicant who is an individual:
- Full name
- Residential address
- Date of Birth
In addition, if the customer is applying as sole trader, we also require:
- Full business name
- Full business address (or residential address)
- Australian Business Number
(Additional information will be collected as part of credit assessment procedures however the
information above is mandatory for every application.)
3.3.1.2 Verification
ING DIRECT has developed an “Identification Form” see (Appendix A) to enable brokers to
easily satisfy the verification of customer’s identity.
To correctly complete the form, follow the steps below:
1. Record details of the person being identified (including all of the details in 3.3.1.1 above)
2. Collect the required identification documents (originals only) and make a copy of them
ING DIRECT Customer Identification Procedures for Brokers 8

3. Record the identification documents provided and verify the customer's name and either
the customer's residential address or date of birth (or both) from the required identification
documents
4. Sign the form
5. Provide a copy of the customer's original identification documents and the completed
Identification Form to ING DIRECT
Documents that can be used to verify the identity of a customer are described in the list
below. You must sight and copy either:
a) Two original documents from List A; or
b) One original document from List A and one original document from List B.
List A
- An Australian Passport (either a
current passport or a passport that
expired within the last 2 years)
- A current Drivers Licence or Proof of
Age card (which shows a
photograph)
- International Passport or identity
card (must be issued by a foreign
Government, the UN or related
agency and must be accompanied
by a translation if not in English)
- A Birth Certificate or Birth Extract
(issued by a State or Territory in
Australia)
- A Citizenship Certificate (issued by
the Commonwealth of Australia)
List B
- A current Pension Card (issued by
Centrelink entitling financial benefits)
- An Australian Tax Office tax
assessment notice (issued in the last
12 months)
- A water rates, council rates or land
valuation notice (issued by a local
government body or utilities provider
within the last 12 months)
- A landline telephone, gas or
electricity notice (issued by a utilities
provider within the last 12 months)
- A bank statement (issued by an
Australian bank in the last 12
months. Please note online
statements are not accepted)
- A government financial benefits
notice (issued in the last 12 months)
3.3.2 Companies
3.3.2.1 Identification
For the purposes of identification under the AML/CTF Act, a customer’s application for a loan
if applying in the capacity of a proprietary or private domestic company must include the
following information:
- Full name of the company as registered by ASIC
- Full Address of the company’s registered office
- Full Address of the company’s principal place of business (if any)
- ACN
- Whether the company is registered by ASIC as public or proprietary
- For proprietary company’s, the full name of each Director of the company
- For proprietary or private companies, the full name of each beneficial owner of the
company (any individual owning 25% or more of the issued capital of the company
through one or more shareholdings). This is not required for a proprietary company that is
licensed and subject to the regulatory oversight of a Commonwealth, State or Territory
statutory regulator in relation to its activities as a company.
- For proprietary or private companies, the full address of each beneficial owner of the
company (any individual owning 25% or more of the issued capital of the company
through one or more shareholdings) 1 This is not required for a proprietary company that is
licensed and subject to the regulatory oversight of a Commonwealth, State or Territory
statutory regulator in relation to its activities as a company.
1
ING DIRECT is currently developing the appropriate forms and systems to facilitate the capture of this information.
We will communicate to you when the additional requirements for company’s should be provided
ING DIRECT Customer Identification Procedures for Brokers 9

(Additional information will be collected as part of credit assessment procedures however the
information above is mandatory for every application for a domestic company.)
3.3.2.2 Verification
ING DIRECT will ensure the required information is verified about the company. However, it is
the broker’s responsibility to ensure all individual Director’s, guarantors and authorised
signatories who will have access to the loan are identified according to the procedure
described in paragraph 3.3.1.2 above for verification of individuals.
3.3.3 Trusts
3.3.3.1 Identification
For the purposes of customer identification of customers who wish to apply for a loan in their
capacity as a Trust the following information must be collected at a minimum:
- Full name of the trust
- Full business name (if any) of the trustee in respect of the trust
- Type of trust
- Country in which the trust was established
- For trusts with individual trustees:
- See the requirements of individuals in paragraph 3.3.1.1 above
- For trusts with company trustees:
- See the requirements for companies in paragraph 3.3.2.1 above 2
- For trusts with individual trustee(s) and company trustee(s):
- The identification information for individuals and trustees in paragraphs 3.3.1.1 and
3.3.2.1 above must be collected.
- Full name and address of each trustee in respect of the trust
- Full name of each beneficiary in respect of the trust (or if the terms of the trust identify the
beneficiaries by reference to membership of a class - details of the class).
The last 2 details do not need to be collected in relation to a trust that is:
- a managed investment scheme registered by ASIC;
- a managed investment scheme that is not registered by ASIC and that only has
wholesale clients and does not make small scale offerings to which section 1012E of the
Corporations Act applies;
- a government superannuation fund established by legislation;
- a trust registered and subject to the regulatory oversight of a Commonwealth statutory
regulator in relation to its activities as a trust.
(Additional information will be collected as part of credit assessment procedures however the
information above is mandatory for every application.)
3.3.3.2 Verification
ING DIRECT will ensure the required information is verified about the trust. However, it is the
broker’s responsibility to ensure all individual Trustees, guarantors and authorised signatories
who have access to the loan are identified according to the procedure described in 3.3.1.1
above for verification of individuals. It is also the responsibility of the broker to obtain from the
customer the original or a certified copy of the Trust Deed and make and provide a copy of
that document to ING DIRECT’s solicitors.
3.4 Conduct Enhanced Identification and Verification
2
ING DIRECT is currently developing the appropriate forms and systems to facilitate the capture of this information.
We will communicate to you when the additional requirements for trusts should be provided.
ING DIRECT Customer Identification Procedures for Brokers 10

In the event the customer poses a higher than normal risk or additional information is required
to satisfy know your customer reporting obligations, additional due diligence is required.
3.4.1 Broker assesses customer risk as higher than standard
This would occur if either the product or jurisdiction factors described are applicable to the
loan.
a) If the customer is not located in Australia, perform the following:
- Determine the customer’s reason for wanting the product
- Record response on application (or attach separate paperwork)
- Collect the country of residence
- Collect “additional know your customer” information or request “additional verification”
evidence to confirm information provided (see below)
b) If the customer wishes to purchase assets not located in Australia:
- Determine the type of asset being purchased
- Determine the country of purchase
- Record response on application
Note: Additional know your customer information may include (depending on the customer
type):
- any other name the customer is known by;
- the customer’s country of citizenship;
- the customer’s country of residence;
- the customer’s occupation or business activities;
- the nature of the customer’s business with ING DIRECT including -
- the purpose of specific transactions; or
- the expected nature and level of transaction behaviour;
- the income or assets available to the customer;
- the customer’s source of funds including the origin of funds;
- the customer’s financial position;
- the beneficial ownership of the funds used by the customer with respect to products held;
the beneficiaries of the transactions being facilitated by the reporting entity on behalf of
the customer including the destination of funds
- the full business name (if any) of the business as registered under any State or Territory
business names legislation;
- the name of any individuals involved in the business;
- collection of identification information of individuals behind the business;
- the nature of the business activities conducted;
- the name and address of any beneficial owner (eg shareholder or beneficiary);
- the date of incorporation or registration of the business.
Additional verification may include additional documents or data to verify the information
provided by the customer.
3.4.2 ING DIRECT assesses customer risk as higher than standard
ING DIRECT may instruct you to collect additional information from the customer. These
additional requirements will become general conditions required before the loan can proceed
to full approval.
The following list includes examples of areas that ING DIRECT may request further
information on:
- Additional documentation to verify information about individuals or the borrowing entity in
the event of a company or trust borrower
ING DIRECT Customer Identification Procedures for Brokers 11

- Responses to various questions to ascertain areas such as the source of funds, reason
for borrowing etc…
- Additional information surrounding customers who are not residents of Australia
- Customer name matches on a Politically Exposed Person’s list and enhanced due
diligence is required
This list in not exhaustive however serves to provide examples of information that may be
required.
3.5 Submit loan application, Identification Form and copies of
identification
ING DIRECT will continue to accept applications as per the current process. ING DIRECT will
also require copies of all identification documents before the loan can proceed. It is also
important the Identification Form is correctly completed and signed. Your broker number must
be provided on the Identification Form.
4 Training
4.1 Initial
ING DIRECT is a Reporting Entity and is responsible for ensuring all our employees and
agents are AML/CTF trained and compliant. ING DIRECT is using the Mortgage & Finance
Association of Australia (MFAA) AML/CTF compliance training program as the training vehicle
for ING DIRECT’s broker training. ING DIRECT has also recently endorsed the Finance
Brokers Association of Australia (FBAA) training package. Either of these industry association
training packages will meet the training requirements for brokers acting for ING DIRECT.
4.1.1 MFAA Training
The online program will be available from 1 st of November 2007 and we encourage all
brokers to complete the training as soon as possible. Brokers must sit the course,
complete the online assessment and obtain a 90% pass mark for each of the five topics
presented. Once Brokers have achieved a pass grade, the system will prompt them to print
out their ‘online course certificate’.
The MFAA will maintain a database of all brokers who complete the training. ING DIRECT will
have access to this database to verify the information.
The MFAA has also recently prepared a brochure that outlines their AML eLearning
accreditation program and assessment, for Brokers. Refer to the MFAA website for further
information at http://www.mfaa.com.au
4.1.2 FBAA Training
Brokers who complete the FBAA training module will need to provide ING DIRECT their
course completion certificate. Brokers must complete the modules 101 and 102 in order to
satisfactorily meet ING DIRECT’s obligations.
These certificates can be faxed to: (02) 9028 4779
4.1.3 New Brokers
As at 12 th December 2007, no new broker will be accredited with ING DIRECT, unless the
AML/CTF training has been completed. All existing brokers are encouraged to complete this
training as soon as possible.
ING DIRECT Customer Identification Procedures for Brokers 12

4.2 Frequency of training
It is important to keep your knowledge of AML/CTF up to date and current. Therefore ING
DIRECT will require all Accredited Introducers to sit the training on an ongoing basis. The
frequency will be communicated to you once determined by ING DIRECT.
4.3 Screening
ING DIRECT has an obligation to perform due diligence on all third parties who assist with
undertaking their obligations under the AML/CTF Act. For this reason, ING DIRECT requires
all accredited introducers to be members of a professional association to ensure this
screening is performed. Any introducer who is accredited via an aggregator must be
appropriately screened by that aggregator.
Screening should comply with the requirements of Australian Standard 4811 Employment
Screening, you should advise ING DIRECT if you do not comply with this standard.
You must keep records of screening undertaken, and make these available to ING DIRECT
upon request.
5 Record Keeping
The AML/CTF Act outlines record-keeping requirements for records relating to identification
procedures.
All records collected by brokers from and on behalf of customers on and after 12 th December
2007 must be sent to ING DIRECT. This includes every document collected for the purpose of
identifying and verifying the customer and all other required documents to approve the loan
(including but not limited to those specified in Section 3).
ING DIRECT will hold all records and we do not require the brokers to retain these records
under the AML/CTF Act.
Records relating to identification procedures include all of the following:
- procedures regarding how identification is carried out
- the copies of documents made as specified in Section 3 and other documents obtained
from the customer including any further information or documents requested by ING
DIRECT
- results of electronic verification
- any other information obtained during the identification procedure
Record-keeping requirements extend to all customers who are identified, even if they do not
proceed with taking up the designated service or product. ING DIRECT reserves the right to
request further copies of documents from brokers where the copies received are not clear
and/or not completed.
Length of time to retain records:
We are required to retain identification records for a period of seven years commencing from
the time we cease to have a relationship with the customer (ie seven years after the account
is closed.)
6 Suspicious Matter Reporting
As our agents, brokers are in some cases best equipped to identify suspicious matters on
behalf of ING DIRECT. ING DIRECT has an obligation to report certain suspicious matters to
ING DIRECT Customer Identification Procedures for Brokers 13

AUSTRAC within three days of a suspicion being formed or within 24 hours if the suspicion
relates to the financing of terrorism.
Suspicious matters must be reported even if the transaction or account does not proceed.
Matters that AUSTRAC requires us to report include suspicions that:
- the customer (or their agent) is not who they claim to be
- information provided may be relevant to an investigation or prosecution of a person for:
(a) evasion or attempted evasion of tax (whether Commonwealth, State or Territory)
(b) an offence against a State, Territory or Commonwealth Law
(c) a money laundering offence; and/or
(d) a financing of terrorism offence.
- the person is or may be attempting to disguise the proceeds of crime
- the person is or may be attempting to finance terrorist activities
- the person is or may be attempting to launder money.
If you have a suspicion about a customer, you must escalate it immediately to the ING
DIRECT Financial Crimes Team financial.crimes@ingdirect.com.au
Please note, it is an offence for ING DIRECT to disclose the outcome of any investigation into
a suspicious matter including whether or not the suspicious matter was reported to
AUSTRAC.
6.1 Guidelines to trigger suspicions
Suspicious activity can come in many forms, Below are some examples to help you identify
suspicious activity. The list is not exhaustive but aims to serve as a guide.
- An individual with discrepancies between their identification documentation;
- An individual who presents seemingly false identification;
- Any case when there is no obvious reason why a person is using the Bank’s services;
- Any use of false names;
- An individual with a variety of similar, but different, addresses;
- An individual who requests to be anonymous and makes unusual requests or wishes to
disguise their purpose for requesting the account
- A business with account turnover or large transactions inconsistent with the size of their
business; and
- Restructuring large transactions into smaller transactions to avoid having the transactions
reported to AUSTRAC.
6.2 Tipping off
Where a suspicious matter comes to your attention you have an obligation to report this to
ING DIRECT immediately. However you may not, in any circumstances inform any one else
(including the customer or their agent) that the matter has been reported to ING DIRECT.
Severe penalties apply for persons found guilty of tipping off, these penalties include
imprisonment for two years.
7 Where do I go to get clarification on an AML/CTF question?
Your first point of contact is the Introducer Website. Please check for updates.
You can also contact your Relationship Manager
For accreditation related matters, please contact Intermediary Services by e-mail:
Intermediary.services@ingbank.com.au
ING DIRECT Customer Identification Procedures for Brokers 14

8 References
The Mortgage & Finance Association of Australia (MFAA)
Search for AML to go to the AML link
www.mfaa.com.au
The Australian Transaction Reports & Analysis Centre (AUSTRAC)
www.austrac.gov.au
Attorney General’s Department
http://www.ag.gov.au
ING DIRECT Customer Identification Procedures for Brokers 15

9 Appendix A: Identification Form
ING DIRECT Customer Identification Procedures for Brokers 16

ING DIRECT Customer Identification Procedures for Brokers 17