Section 3: Identification of customers. (AS AMENDED BY MONEY LAUNDERING (PROHIBITION) (AMENDED) ACT, 2012)

(1) A Financial Institution and Designated Non-Financial Institution shall-
(a) identify a customer, whether permanent or occassional, natural or legal person, or any other form of legal arrangements, using identification documents as may be prescribed in any relevant regulation;
(b)
verify the identity of that customer using reliable, independent source documents, data or information; and
(c)
identify the beneficial owner and take reasonable measures to verify the identity of the beneficial owner using relevant information or data obtained from a reliable source such that the Financial Institution or the Designated Non-Financial Institution is satisfied that it knows who the beneficial owner is. (as amended by Money Laundering (Prohibition)(Amendment ) Act 2012)
(2) Financial Institutions and Designated Non-Financial Institutions shall undertake customer due diligent measures when-
(a) establishing business relationships;
(b)
carrying out occassional transactions above the applicable designated threshold prescribed by relevant regulation, including transactions carried out in a single operation or in several operations that appear to be linked;
(c)
carrying out occassional transaction that are wire transfers;
(d)
there is a suspicion of money laundering or terrorist financing, regardless of any exemptions or thresholds; or
(e) the Financial Institutions or Designated Non-Financial Institution has doubts about the veracity or adequacy of previously obtained customer identification data.
(3)
Financial Institutions or Designated Non-Financial Institution shall:
(a)
conduct on-going due diligent on a business relationship;
(b)
scrutinize transactions undertaken during the course of the relationship to ensure that the transactions are consistent with the institution's knowledge of the customer, their business and risk profile and where necessary, the source of funds; and
(c) ensure that documents, data or information collected under the customer due diligence process is kept up-to-date and relevant by undertaking reviews of existing records, particularly for higher risk categories of customers or business relationships.
(4)
Financial Institutions and Designated Non-Financial Institutions shall take enhanced measures to manage and mitigate the risks and:
(a)
where higher risks are identified, take simplified measure to manage and mitigate the risks;
(b)
where lower risks are identified, take simplified measures to manage and mitigate the risks provided that simplified customer due diligent measures are not permitted whenever there is suspicion of money laundering or terrorist financing;
(c)
in the case of cross-border correspondent banking and other similar relationships and in addition to carrying out customer due diligence measures-
(i) gather sufficient information about a respondent institution
(ii) assess the respondent institution's anti-money laundering and combating the financing of terrorism controls;
(iii) document respective responsibilities of each institution in this regard; and
(iv) obtain management approval before establishing new correspondent relationships.
(5) A casual customer shall comply with the provisions of sub-section (2) of this section for any number or manner of transactions including wire transfer involving a sum exceeding US$1,000 or its equivalent if the total amount is known at the commencement of the transaction or as soon as it is known to exceed the sum of US$1,000 or its equivalent.
(6)
Where a Financial Institution or Designated Non-Financial Institution suspects or has reasonable grounds to suspect that the amount involved in a transaction is the proceeds of a crime or an illegal act it shall require identification of the customer notwithstanding that the amount involved in the transaction is less than US$1,000 or its equivalent.
(7)
Where the customer is a politically exposed person, the Financial Institution or Designated Non-Financial Institution shall in addition to the requirements of sub-section (1)and (2) of this Section-
(a) put in place appropriate risk management systems; and
(b) obtain senior management approval before establishing and during any business relationship with the politically exposed person.