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Conducting KYC and CDD
OfCourse, you need to eliminate the risk of dragging the name of your company to any potential threat. It is alwasy smart to know the UBO of the company for AML. and there is also compliance requirement we have to deal with is the FATCA for the US Indicia.
The objective of KYC/AML/CFT guidelines is to prevent banks from being used, intentionally or unintentionally, by criminal elements for money laundering or terrorist financing activities. KYC procedures also enable banks to know/understand their customers and their financial dealings better which in turn help them manage their risks prudently.
Management has to guard the company for the sake of all stake holders against theft, fraud and operational losses.
The question how well the KYC needs to be performed depends largely on the type of service and its financial value.
In a low value cash and carry environment, like for example retail fast food, or supermarkets, literally no KYC neds to be performed, while in a high value financial services relationship a very detailed KYC might be required.
The starting point should always be to have a proper risk analysis performed for each product and decide on a case by case basis how far KYC is needed.
The risk assessment is on one hand driven by AML requirements stemming from AML laws and AML regulatory rules. On the other hand they should also include robust measures to prevent external or internal fraud and minimize operational losses.
It is generally wise to have a KYC to avoid losses and risks, but KYC needs to be appropriate to the services and products offered, and the nature of the business.
Yes, Its very important to know your customer ,culture and business expectation for provide effective business value delivery.
YES,KNOW YOUR CUSTOMER VERIFICATION SHOULD BE COMPLETED BEFORE CLOSING THE TRANSACTION.
