KYC Quality Control

Customer Identification Program (CIP)

Verify Customer Identity

Obtain copies of valid identification documents (e.g., passport, driver's license)

Compare information on identification documents with customer-provided data

Document discrepancies and take necessary actions

Screen for Sanctions and PEPs

Conduct a background check on the customer against sanction lists and politically exposed persons (PEPs) databases

Flag any matches or potential matches for further review

Document the results and actions taken

Assess Customer Risk

Evaluate the customer's risk level based on factors such as their industry, geographic location, transaction volume, etc.

Assign a risk rating (e.g., low, medium, high) to the customer

Update risk assessment periodically or when significant changes occur

Customer Due Diligence (CDD)

Obtain and Verify Beneficial Ownership Information

Identify the individuals or entities with significant ownership or control over the customer (beneficial owners)

Verify the identity and collect necessary information on beneficial owners

Document the ownership structure and keep records up to date

Assess Source of Funds and Wealth

Determine the source of the customer's funds and wealth

Evaluate the legitimacy and appropriateness of the funds

Document the findings and any concerns identified

Evaluate Business Relationships

Understand the nature and purpose of the business relationship with the customer

Assess the potential risks associated with the relationship (e.g., money laundering, terrorist financing)

Monitor the relationship periodically and review any significant changes

Enhanced Due Diligence (EDD)

Apply Enhanced Due Diligence Measures

Determine if the customer falls into a high-risk category (e.g., high-risk country, high-value transactions)

Implement additional due diligence measures appropriate for the identified risks

Document the rationale behind enhanced due diligence decisions

Review and Update Customer Information

Conduct periodic reviews of customer information to ensure accuracy and relevancy

Update customer profiles when significant changes occur

Retain documentation of review activities and outcomes

Record Keeping

Maintain Adequate Records

Establish a system to capture and retain all relevant KYC documentation and information

Ensure records are easily accessible for internal and external reviews

Comply with regulatory requirements regarding record retention periods

Reporting and Compliance

Report Suspicious Activities

Train staff to recognize and report suspicious activities or transactions

Follow internal procedures for reporting suspicious activities to the appropriate authorities

Document the reporting process and any actions taken

Stay Compliant with Regulations

Stay up to date with relevant KYC regulations and ensure compliance

Conduct periodic internal audits to assess compliance with KYC procedures

Address any identified compliance gaps or issues promptly