FAQs

2+2 is the concept of matching multiple pieces of identifiable information together to verify the identity of an individual for electronic identification.

More specifically this includes the requirement of matching the name and address to 2 different sources or the name and address to 1 source and the name and date of birth to another.

The 2+2 approach takes a stricter view when compared with Standard Due Diligence and the extent of the due diligence carried out should correspond with what has been assessed to be the risk presented by the client.

When an electronic check is carried out an additional verification step must be taken to prevent the risk of fraud that is increased by not having met the individual face to face. The exact nature of this can take several forms.

Our ID verification service provides access to a range of options to help verify the identity of a customer.

The main legislation providing the basis for AML Regulations is the Money Laundering, Terrorist financing and Transfer of Funds Regulations 2017, with amendments in 2019 and 2020.

Risk assessments are a way of identifying and evaluating risks posed by clients, products and services, in relation to money laundering. They can help with compliance, by helping to recognise which level of due diligence is needed for certain clients/ products, and in order to comply with regulatory requirements.

Beneficial owners/ ownership refers to those who ultimately own or control an asset/business even if the title is in another’s name.

Know Your Customer (KYC) differs between individuals and companies. For an individual the aim is to confirm the identity of the person you are doing business with. Whereas Know Your Business (KYB) requires knowledge and verification of often complex structures, such as ultimate beneficial ownership, subsidiaries and directors.

Take a look at our best practice pages giving details of AML checks for individuals and entities.

Physical ID checks will capture an image of an identification document, such a passport or driving licence, and a photo of the person presenting the document. The document will be assessed for validity and biometric comparison to photo undertaken.

Electronic ID checks aim to confirm the identity through an assessment of the individual’s digital footprint.

A risk based approach refers to not taking a one-size-fits-all approach for your AML policy. The approach you take to due diligence should reflect the level of risk that you face. Whether that’s in relation to your customers, the services or products that you provide, or the jurisdiction that you work in.

Take look at our best practices page related to the risk based approach for further details.

Anti Money Laundering (AML) is the overarching framework of requirements and regulations in which businesses must comply with. Know Your Customer (KYC) is about identifying and verifying your customer, and being able to risk-rate them. Customer due diligence is risk-based assessments and checks to understand your customers – particularly their financial situation and patterns of activity.

Take a look at our best practices pages for more detailed information.

The best place to obtain relevant anti money laundering guidance will be from your regulating body. Where you are not a member of a regulating body then you will need to be registered with HMRC for AML supervision.

The JMLSG website is another good source of guidance.

Enhanced due diligence is required where the customer and product/service combination is considered to be of greater risk. This higher level of due diligence is required to mitigate the increased risk.

For further details take a look at our best practice article on enhanced due diligence.

In the majority of cases, standard due diligence is the level that will be used. These are generally situations where there is a potential risk, but it is unlikely these risks will be realised.

For further details take a look at our best practice article on standard due diligence.

Simplified due diligence is the lowest level of due diligence that can be completed on a customer. This is considered appropriate where there is little opportunity or risk of your services or customer becoming involved in money laundering or terrorist financing.

For further details take a look at our best practice article on simplified due diligence.

The frequency at which you check customers for sanctions will vary between businesses, but best practice suggests this should be done during:

• Onboarding – This will enable you to know whether you should prevent the party from becoming a customer in the first place.
• Periodically – Sanction lists are updated on a regular basis. Should your customer be added to a sanction list you need to be able to take action.
• Continually – On going monitoring is considered best practice and is a must if you have a high level of exposure to sanctions risk.
• Signification changes are made – Changes to a customer’s name, location and other details should trigger a rescreening against sanction lists.

Simply put, yes. Checking customers for sanctions is often a legal requirement. For the UK, this comes under the sanctions and anti-money laundering act 2018 (SAMLA).

Failing to comply with these regulations can result in severe penalties, including but not restricted to fines and legal action.

Even for businesses that are not legally required to check for sanctioned parties within their customers, it is worth considering the reputational damage that may be caused.

Further details for companies subject to OFAC sanction requirements may find the following information useful. https://ofac.treasury.gov/recent-actions/20190502_33.

If you are looking for help sanctions screening your customers, take a look at our Watchlist Guard service.

The minimum information required to perform a watchlist screening is the name of the individual or entity. For the most accurate results further details such as, date of birth, address and nationality should be included.

Watchlist screening identifies clients who may be on Sanctions lists, PEPs, RCAs, or to find adverse media links. All of which need to be dealt with as having higher AML/ CTF Risks, or even not to do business with at all in line with regulations.

Politically exposed person (PEP) Screening helps identify potential clients who may be politically exposed, and therefore pose a significantly larger risk in terms of money laundering and corruption etc. This enables your business to take appropriate action to ensure regulatory compliance.