Financial Intelligence Centre Act, 2001 (Act No. 38 of 2001)

Notices

Guidance Note 3

Guidance for Banks on Customer Identification and Verification and Related Matters

Establishing and Verifying Identities

Natural Persons - South African Citizens and Residents

9. Acceptable KYC procedures for non face-to-face verification

Purchase

Regulation 4 of the Regulations concerning the verification of a person's identity is based on a view that the customer is met face-to-face when his or her particulars are obtained.

Regulation 18 of the Regulations provides for instances in which client information is obtained in a non face-to-face situation. In such cases, banks "must take reasonable steps" to confirm the existence of the client and to verify the identity of the natural person involved.

Additional guidance may be taken from the Core Principles. These indicate that banks should apply equally effective customer identification procedures and ongoing monitoring standards for non face-to-face customers. In accepting business from non face-to-face customers:

•	banks should apply customer identification procedures to non face-to-face customers that are as effective as those that were applied to customers who were available for interview; and

•	there must be specific and adequate measures to mitigate the higher risk.

According to the Core Principles, examples of measures to mitigate risk include:

•	certification of documents presented;

•	requisition of additional documents to complement those that are required for face-to-face customers;

•	independent contact with customer by the bank;

•	third party introduction.

Decisions concerning the additional steps to be taken in cases of a non face-to-face situation should be based on a bank’s risk framework, referred to in paragraph 2 above.