AML Compliance has grown to become an integral part of the financial services sector.
Following the law requirements, Our Cyprus-based AML Compliance team performs client identification and due diligence procedures comprised of the following four steps:
identifying the client and verifying their identity on the basis of documents, data or information obtained from a reliable and independent source;
identifying any beneficial owners and taking risk-based and adequate measures to understand the ownership and control structure of the client; UBO is defined as any person that holds (directly or indirectly) more than 25% of the company’s shares. In the case where a UBO cannot be identified based on the shares’ ownership (no physical person holds more than 25%), a controlling person must be specified, and this person will be treated as the UBO of the company
obtaining information on the purpose and intended nature of the business relationship; and
conducting ongoing monitoring of the business relationship.
The client due diligence procedure commences at the onboarding of the client in our firm, when the business relationship is established, but continues during the course of the entire relationship, through ongoing monitoring.
The review period depends on the client’s risk categorization.
Terminology
AML – Anti-Money Laundering
Due Diligence – Due diligence is an investigation, audit, or review performed to confirm facts, details or documentation of a matter under consideration.
UBO – Ultimate Beneficial Owner
KYC – Know Your Client
PEP – Politically Exposed Person
GDPR – General Data Protection Regulation
Risk categorization
The risk categorization of the client is decided by following a Risk-Based Approach that takes into account the client risk, geographic risk and service risk.
Clients that are categorized as High Risk are normally reviewed annually, while Medium Risk clients are reviewed every 3 years and Low-Risk clients every 5 years.
However, an ad hoc review will be performed in the case major changes are identified (i.e. transfer of shares, change of activities, change of countries of operations, a related country being categorized as High Risk, UBOs or related parties becoming PEPs or entering a sanctions list etc.).
In order to be able to correctly categorize the client and decide on the commencing/continuation of the business relationship, the AML Compliance team needs to collect various KYC documents.
A non-exhaustive list indicating the documents that are typically collected is presented in the below table:
Type of Client |
Required Documentation
|
Company Incorporated in Cyprus | 1. Certificate of Incorporation 2. Certificate of Registered Office 3. Certificate of Directors & Secretary 4. Certificate of Shareholders 5. Memorandum & Articles of Association 6. Updated Group Structure 7. Any Trust Agreements that may exist between the shareholders and the UBOs 8. To complete & sign our KYC Form for Legal Entities – includes contact information & economic profile details
|
Company Incorporated Abroad | 1. Certificate of Incorporation 2. Recent (less than 6 months old) Certificate of Incumbency or other official document, obtained from a reliable and independent source, that confirms the good standing status of the company and denotes the currently active Directors, Secretary & Shareholders 3. Memorandum & Articles of Association 4. Updated Group Structure – Updated information/documentation leading to the UBO of the company 5. Any Trust Agreements that may exist between the shareholders and the UBOs 6. To complete & sign our KYC Form for Legal Entities – includes contact information & economic profile details
|
The below table presents a non-exhaustive list of the documents that are required to be collected for the physical persons that are involved in the company’s structure:
Function |
Required Documentation
|
-Director -Secretary -Authorized Person -Trustee (Shareholder)
| 1. Passport or Identity Card 2. Recent (less than 6 months old) Utility Bill or other official documents that denotes his residential address 3. Updated CV 4. To complete & sign our KYC Form for Directors/Authorized Persons – includes basic personal and contact details 5. To complete & sign our GDPR Consent Form – to allow us to keep their personal details in our records |
-UBO | 1. Passport or Identity Card 2. Recent (less than 6 months old) Utility Bill or other official documents that denotes his residential address 3. Updated CV 4. Recent (less than 6 months old) Bank Reference Letter 5. Latest Tax Return 6. To complete & sign our KYC Form for Directors/Authorized Persons – includes basic personal and contact details and the persons’ economic profile 7. To complete & sign our GDPR Consent Form – to allow us to keep their personal details in our records |
Additional information and documentation
Please note that, for clients categorized as High Risk, additional documentation will be required to be provided, to evidence the client’s and the UBOs’ source of wealth/funds.
In case the Secretary is a company that is a regulated administrator, we need to confirm the registration to the relevant authority and no further documents will be required.
In case the Shareholder is a company, we need to obtain the Certificate of Shareholders (or recent Certificate of Incumbency if the company is registered abroad).
The same needs to be obtained for all companies in the line of shareholders up to the UBOs.
In case the shareholders are Trusts/Funds/Foundations further documents will be required for the legal entity and the related parties.
Major and minor shareholders
In case the client or the shareholder is a Public Company, listed on an approved stock exchange (i.e. regulated by a recognized regulator within the European Economic Area or a third country with equivalent disclosure and transparency requirements), the documentation that can be obtained from public sources might be acceptable.
In these cases, Simplified Due Diligence (SDD) might apply and it may not be necessary to trace the full ownership structure and identity of the ultimate beneficial owner.
However, we will need evidence via authoritative documentation that the client is listed or regulated – or is owned by such a company.
For Minor Shareholders (holding less than 25% and not being identified as Controlling Persons), if the Minor Shareholder is a legal entity, we need to obtain the Certificate of Shareholders (or Certificate of Incumbency) in order to identify the physical persons that are the beneficial owners.
No further documentation is required to be provided for these persons unless there are findings during the risk search that we will perform. In that case, some documents/clarifications may be requested in order to resolve the findings.
The dedicated and expert AML team
Our expert professionals can assist and guide current and prospective clients during the AML check procedure in order to minimize risks and effort.
Working with advanced tools, knowledge, and methodology, our clients can rest assured that their personal information, company and asset data are well protected and remain strictly protected and confidential.