Know Your Customer


IS MANDATORY FOR FINANCIAL INSTITUTIONS

The banking business is based on confidence built upon good service, knowing the customers, and correct decisions. We ask you questions on different matters because we want to know you and how you bank with us. When we know you, we will be able to give you good advice and offer you products and services suiting your needs.

What information can KAPITAL BANC ask for?

Monetary and financial laws require KAPITAL BANC to have full and updated knowledge about its clients. To take into consideration your professional and financial situation, your bank needs to know your activity, the amount and source of your revenues, and the composition and range of your wealth.

Why are you asking me for information that I have already given to KAPITAL BANC?

KAPITAL BANC must keep up-to-date information on you. This can be done at a meeting with your advisor, at the customer relations center, or by letter as part of a national information-gathering campaign.

What does KAPITAL BANC do with this information?

Your personal details are kept strictly confidential and are protected by the law on banking secrecy, which prohibits them from being communicated to a third party.

In case of refusal on my behalf, what would happen?

The bank will be required to discontinue the relationship with the customer if this updated information is not Provided.

(1) Article L. 561-8 of the Monetary and Financial code states that ‘When a person mentioned in article l. 561-2 is unable to identify his client or to obtain information on the object and nature of the business relationship, he must not execute any transaction, whatever its terms, and neither establish nor pursue any business relationship. When he was unable to identify his client or to obtain information on the object and nature of the business relationship, and that this has nevertheless been established pursuant to point II of article l. 561-5, he must discontinue it.

For a natural person, they need to know:

  1. Identity: everything that is listed on the identification document, such as full name, date, and place of birth, nationality, residential address, etc. In many countries, the Banks also need to know whether you are a “US Person” because of the FATCA requirements.
  2. Political Status: whether the client or his/her relative is holding on to any prominent political appointment.
  3. Criminal/Terrorism/Sanctions link: whether the client is linked to any financial crime, terrorism, or sanctions.
  4. Source of fund: the source of the fund has to be legal, of course.
  5. The expected volume of transaction: if there is an exceptionally large amount of money involved in the transaction, the Bank needs to ensure that the source of the fund is legal.

For an entity, they need to know:

  1. Beneficial Owner: who is ultimately in control of this entity. Identification documents required.
  2. Representative: who is operating this entity on behalf of the Owner. Identification documents required.
  3. Political Status: Is the entity a State-Owned Enterprise (SOE).
  4. Criminal/Terrorism/Sanctions link.
  5. Source of the fund.
  6. The expected volume of transaction.

We have covered the requirements, now let us look at the process:

  1. Client onboarding: The Bank establishes a relationship with the Client and collects all the identification or business registration documents.
  2. Screening: The Client will be checked against a database for name matches with politicians, criminals, terrorists, and other sanctioned persons/entities. If there are no matches, good, they can carry on with their business relationships. If there are matches, the Compliance Officers will be beginning their painful process of verifying whether the matches are real matches or false matches. If it is a false match, good, if not they will need to decide what to do with the Client now that there is a match with the database. If the Client is a criminal or terrorist-linked, they probably need to freeze the account and submit a report to the authorities. Another form of screening is to monitor the transactions and spot any unusual transactions. If the transaction is out of the norm, the Bank needs to verify that nothing fishy is going on.
  3. Repeat screening. The screening process will repeat periodically as the Client status and the database may change over time.

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