Customer identification and AML directives

Money laundering and terrorist financing are problems that require international collaboration to control.

The FATF, the Financial Action Task Force, was created in 1989 to increase international collaboration. Over 200 countries and jurisdictions are engaged. Its objective is to issue recommendations that serve as standards for a coordinated global response to prevent organised crime, corruption, and terrorism. Likewise, to achieve the political will to develop legislation in different geographical areas to combat these issues. In 1990, it issued its first 40 Recommendations.

The European Union drew up its Directives to prevent money laundering and terrorist financing based on the FATF’s work.

The first Directive, Directive 91/308/EEC, considers the FATF’s 40 Recommendations and establishes a framework to prosecute all money laundering, not only those resulting from drug trafficking. The Directive was shortly followed by Directive 2001/97/EC, which extended the underlying offences and the persons subject to the obligation. Directive 2005/60/EC was the third. Directive 2015/849/EU, the fourth one, introduced the definition of politically exposed persons. And the fifth, known as AMLD 5, is Directive 2018/843/EU, with a deadline for transposition in the member states of 10 January 2020 and complemented by criminal measures in Directive 2018/1673/EU.

Several Directives have evolved to respond to new challenges related to new technologies or improve the existing framework by introducing new aspects or new obliged parties. They all share a common substratum: the need to identify customers to apply due diligence measures appropriate to their risk profile.

The Directives require transposition of the rules into local laws, KYC (know your customer) processes in an increasingly digitalised environment nowadays have to take into account the potential to identify customers through digital tools that are referred to in the eIDAS Regulation (Regulation (EU) No 910/2014 of the European Parliament and of the Council of 23 July 2014 on electronic identification and trust services for electronic transactions in the internal market and repealing Directive 1999/93/EC).

Alongside the tools provided for in eIDAS, each State may locally envisage the use of remote identification tools based on secure video identification and/or video conferencing systems.

Spanish Law 10/2010, which transposes the European Directives and its implementing Regulation, allows the supervisory body, SEPBLAC (Executive Service of the Commission for the Prevention of Money Laundering and Monetary Offences) to authorise remote identification procedures.

Since SEPBLAC authorised in 2017 the identification of customers by video identification procedure, Lleida.net has made robust and secure tools that comply fully with the regulation available to the market to facilitate KYC processes for its customers.

Lleida.net is committed to offering the best guarantees to its customers and, that is why eKYC tool has been accredited by an independent third party, a Conformity Assessment Body, to ensure that it complies with SEPBLAC regulations and international standards concerning remote identification: https://www.lleida.net/docs/en/remote-identification.pdf

 

 

Leave a Comment