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Location: Central Bank of Bahrain Volume 4—Investment Business > Part A > Business Standards > FC Financial Crime > FC-1 Customer Due Diligence
  • FC-1 Customer Due Diligence

    • FC-1.1 General Requirements

      • Verification of Identity and Source of Funds

        • FC-1.1.1

          Investment firm licenseesG must establish effective systematic internal procedures for establishing and verifying the identity of their customers and the source of their funds. Such procedures must be set out in writing and approved by the investment firm licensee'sG Board of Directors and senior managementG (as applicable) and must be strictly adhered to.

          Amended: October 2014

        • FC-1.1.2

          Investment firm licenseesG must implement the customer due diligence measures outlined in Chapter FC-1 when:

          (a) [This Sub-paragraph was deleted in July 2018];
          (b) Establishing business relations with a new or existing customer;
          (c) A change to the signatory or beneficiary of an existing account or business relationship is made;
          (d) Customer documentation standards change substantially;
          (e) The licenseeG has doubts about the veracity or adequacy of previously obtained customer due diligence information;
          (f) A significant transaction takes place;
          (g) There is a material change in the way that an account is operated or in the manner in which the business relationship is conducted; or
          (h) There is a suspicion of money laundering or terrorist financing.
          Amended: July 2018
          Amended: January 2007

        • FC-1.1.2A

          Investment firm licenseesG must understand, and as appropriate, obtain information on the purpose and intended nature of the business relationship.

          Added: October 2014

        • FC-1.1.2B

          Investment firm licenseesG must conduct ongoing due diligence on the business relationship, including;

          (a) Scrutinizing transactions undertaken throughout the course of that relationship to ensure that the transactions being conducted are consistent with the institution's knowledge of the customer, their business and risk profile, including, where necessary, the source of funds; and
          (b) Ensuring that documents, data and information collected under the CDD process is kept up-to-date and relevant, by undertaking reviews of existing records, particularly for higher risk categories of customers.
          Amended: October 2017
          Added: October 2014

        • FC-1.1.3

          For the purposes of this Module, 'customer' includes counterparties such as financial markets counterparties, except where financial institutions are acting as principals where simplified due diligence measures may apply. These simplified measures are set out in Section FC-1.8.

          Amended: January 2007

        • FC-1.1.4

          The CBB's specific minimum standards to be followed with respect to verifying customer identity and source of funds are contained in Section FC-1.2, with further explanations provided in Guidance Notes (see Supplementary Information, item FC-(v), in Part B of Volume 4). Enhanced requirements apply under certain high-risk situations: these requirements are contained in Sections FC-1.3 to FC-1.5 inclusive. Additional requirements apply where a licenseeG is relying on a professional intermediary to perform certain parts of the customer due diligence process: these are detailed in Section FC-1.6. Simplified customer due diligence measures may apply in defined circumstances: these are set out in Section FC-1.8.

          Amended: January 2007

      • Verification of Third Parties

        • FC-1.1.5

          Investment firm licenseesG must obtain a signed statement from all new customers (or for one-off transactions above the BD 6,000 threshold) confirming whether or not the customer is acting on their own behalf or not. This undertaking must be obtained prior to conducting any transactions with the customer concerned.

        • FC-1.1.6

          Where a customer is acting on behalf of a third party, the licenseeG must also obtain a signed statement from the third party, confirming they have given authority to the customer to act on their behalf. Where the third party is a legal person, the licenseeG must have sight of the original Board resolution (or other applicable document) authorising the customer to act on the third party's behalf, and retain a certified copy.

        • FC-1.1.7

          Investment firm licenseesG must establish and verify the identity of the customer and (where applicable) the party/parties on whose behalf the customer is acting, including the Beneficial Owner of the funds. Verification must take place in accordance with the requirements specified in this Chapter.

        • FC-1.1.8

          Where financial services are provided to a minor or other person lacking full legal capacity, the normal identification procedures as set out in this Chapter must be followed. In the case of minors, investment firm licenseesG must additionally verify the identity of the parent(s) or legal guardian(s). Where a third party on behalf of a person lacking full legal capacity wishes to open business relations, the licensee must establish the identity of that third party as well as the person conducting the business.

          Amended: January 2007

      • Anonymous and Nominee Accounts

        • FC-1.1.9

          Investment firm licenseesG must not establish or keep anonymous accounts or accounts in fictitious names. Where investment firm licenseesG maintain a nominee account, which is controlled by or held for the benefit of another person, the identity of that person must be disclosed to the licenseeG and verified by it in accordance with the requirements specified in this Chapter.

      • Timing of Verification

        • FC-1.1.10

          Investment firm licenseesG must not commence a business relationship or undertake an occasional transaction (above the threshold) with a customer before completion of the relevant customer due diligence ('CDD') measures specified in Chapter FC-1. However, verification may be completed after receipt of funds in the case of non face-to-face business, or the subsequent submission of CDD documents by the customer after initial face-to-face contact, providing that no disbursement of funds takes place until after the requirements of this Chapter have been fully met.

      • Incomplete Customer Due Diligence

        • FC-1.1.11

          Where a licenseeG is unable to comply with the requirements specified in Chapter FC-1, it must consider whether to terminate the relationship or not proceed with the transaction. If funds have been received, these must be returned to the counterparty in the same method as originally received. If it proceeds with the transaction (to avoid tipping off the customer), it should additionally consider whether it should file a suspicious transaction report (STR).

          Amended: October 2015
          Amended: July 2010

        • FC-1.1.12

          See also Chapter FC-4, which covers the filing of suspicious transaction reports. Regarding the return of funds to the counterparty, if funds are received in cash, funds should be returned in cash. If funds are received by wire transfer, they should be returned by wire transfer.

          Amended: October 2014

      • [Deleted]

        • FC-1.1.13

          [This Paragraph was deleted in October 2014.]

          Deleted: October 2014

        • FC-1.1.14

          [This Paragraph was deleted in October 2014.]

          Deleted: October 2014

    • FC-1.2 Face-to-face Business

      • Natural Persons

        • FC-1.2.1

          If the customer is a natural person, investment firm licenseesG must obtain and record the following information (in hard copy or electronic form), before providing financial services of any kind:

          (a) Full legal name and any other names used;
          (b) Full permanent address (i.e. the residential address of the customer; a post office box is insufficient);
          (c) Date and place of birth;
          (d) Nationality;
          (e) Passport number (if the customer is a passport holder);
          (f) CPR or residency permit number (for residents of Bahrain or GCC states);
          (g) Telephone/fax number and email address (where applicable);
          (h) Occupation or public position held (where applicable);
          (i) Employer's name and address (if self-employed, the nature of the self-employment);
          (j) Type of account, and nature and volume of anticipated business dealings with the licenseeG ;
          (k) Signature of the customer(s); and
          (l) Source of funds.
          Amended: July 2018
          Amended: July 2010
          Amended: January 2007

        • FC-1.2.2

          See the Guidance Notes (filed under Supplementary Information in Part B of Volume 4) for further information on source of funds (FC-1.2.1(1)) and CDD requirements for Bahrain residents (FC-1.2.1(c) & (f)).

        • FC-1.2.3

          Investment firm licenseesG must verify the information in Paragraph FC-1.2.1(a) to (f), by the following methods below; at least one of the copies of the identification documents mentioned in (a) and (b) below must include a clear photograph of the customer:

          (a) Confirmation of the date of birth and legal name, by taking a copy of a current valid official original identification document (e.g. birth certificate, passport, CPR or residency permit);
          (b) Confirmation of the permanent residential address by taking a copy of a recent utility bill, bank statement or similar statement from another licenseeG or financial institution, or some form of official correspondence or official documentation card, such as CPR, from a public/governmental authority, or a tenancy agreement or record of home visit by an official of the licenseeG ; and
          (c) Where appropriate, direct contact with the customer by phone, letter or email to confirm relevant information, such as residential address information.
          Amended: July 2010
          Amended: January 2007

        • FC-1.2.4

          Any document copied for the purpose of identification verification must be an original. An authorised official of the licenseeG must certify the copy, by writing on it the words 'original sighted', together with the date and his signature. Equivalent measures must be taken for electronic copies.

          Amended: January 2007

        • FC-1.2.5

          Identity documents which are not obtained by an authorised official of the licenseeG in original form (e.g. due to a customer sending a copy by post following an initial meeting) must instead be certified (as per FC-1.2.4) by one of the following from a GCC or FATF member state:

          (a) A lawyer;
          (b) A notary;
          (c) A chartered/certified accountant;
          (d) An official of a government ministry;
          (e) An official of an embassy or consulate; or
          (f) An official of another licensed financial institution or of a licensed associate company of the licenseeG .
          Amended: July 2010
          Amended: January 2007

        • FC-1.2.6

          The individual making the certification under FC-1.2.5 must give clear contact details (e.g. by attaching a business card or company stamp). The licenseeG must verify the identity of the person providing the certification through checking membership of a professional organisation (for lawyers or accountants), or through checking against databases/websites, or by direct phone or email contact.

          Amended: January 2007

      • Legal Entities or Legal Arrangements (such as trusts)

        • FC-1.2.7

          If the customer is a legal entity or a legal arrangement such as a trust, the licenseeG must obtain and record the following information from original identification documents, databases or websites, in hard copy or electronic form, to identify the customer and to take reasonable measures to verify its identity, legal existence and structure:

          (a) The entity's full name and other trading names used;
          (b) Registration number (or equivalent);
          (c) Legal form and proof of existence;
          (d) Registered address and trading address (where applicable);
          (e) Type of business activity;
          (f) Date and place of incorporation or establishment;
          (g) Telephone, fax number and email address;
          (h) Regulatory body or listing body (for regulated activities such as financial services and listed companies);
          (hh) The names of the relevant persons having a senior management position in the legal entity or legal arrangement;
          (i) Name of external auditor (where applicable);
          (j) Type of account, and nature and volume of anticipated business dealings with the licenseeG ; and
          (k) Source of funds.
          Amended: October 2017
          Amended: January 2007

        • FC-1.2.8

          The information provided under FC-1.2.7 must be verified by obtaining certified copies of the following documents, as applicable (depending on the legal form of the entity):

          (a) Certificate of incorporation and/or certificate of commercial registration or trust deed;
          (b) Memorandum of association;
          (c) Articles of association;
          (d) Partnership agreement;
          (e) Board resolution seeking the financial services (only necessary in the case of private or unlisted companies);
          (f) Identification documentation of the authorised signatories of the account (certification not necessary for companies listed in a GCC/FATF state);
          (g) Copy of the latest financial report and accounts, audited where possible (audited copies do not need to be certified); and
          (h) List of persons authorised to do business on behalf of the company and in the case of the opening of an account, a Board resolution (or other applicable document) authorising the named persons to operate the account (resolution only necessary for private or unlisted companies).
          Amended: July 2016
          Amended: January 2007

        • FC-1.2.8A

          For customers that are legal persons, Investment firm licenseesG must identify and take reasonable measures to verify the identity of beneficial owners through the following information:

          (a) The identity of the natural person(s) who ultimately have a controlling ownership interest in a legal person, and
          (b) To the extent that there is doubt under (a) as to whether the person(s) with the controlling ownership interest is the beneficial owner(s), or where no natural person exerts control of the legal person or arrangement through other means; and
          (c) Where no natural person is identified under (a) or (b) above, the identity of the relevant natural person who holds the position of senior managing official.
          Added: October 2017

        • FC-1.2.9

          Documents obtained to satisfy the requirements in Paragraph FC-1.2.8 above must be certified in the manner specified in Paragraphs FC-1.2.4 to FC-1.2.6.

          Amended: January 2007

        • FC-1.2.9A

          For the purpose of Paragraph FC-1.2.8(a), the requirement to obtain a certified copy of the commercial registration, may be satisfied by obtaining a commercial registration abstract printed directly from the Ministry of Industry, Commerce and Tourism's website, through "SIJILAT Commercial Registration Portal".

          Added: January 2017

        • FC-1.2.10

          The documentary requirements in Paragraph FC-1.2.8 above do not apply in the case of listed companies: see Section FC-1.8 below. Also, the documents listed in Paragraph FC-1.2.8 above are not exhaustive: for customers from overseas jurisdictions, documents of an equivalent nature may be produced as satisfactory evidence of a customer's identity.

          Amended: January 2007

        • FC-1.2.11

          Investment firm licenseesG must also obtain and document the following due diligence information. These due diligence requirements must be incorporated in the licensee'sG new business procedures:

          (a) Enquire as to the structure of the legal entity or trust sufficient to determine and verify the identity of the ultimate beneficial owner of the funds, the ultimate provider of funds (if different), and the ultimate controller of the funds (if different);
          (b) Ascertain whether the legal entity has been or is in the process of being wound up, dissolved, struck off or terminated;
          (c) Obtain the names, country of residence and nationality of DirectorsG or partners (only necessary for private or unlisted companies);
          (d) Require, through new customer documentation or other transparent means, updates on significant changes to corporate ownership and/or legal structure;
          (e) Obtain and verify the identity of shareholdersG holding 20% or more of the issued capital (where applicable). The requirement to verify the identity of these shareholdersG does not apply in the case of listed companies;
          (f) In the case of trusts or similar arrangements, establish the identity of the settlor(s), trustee(s), and beneficiaries (including making such reasonable enquiries as to ascertain the identity of any other potential beneficiary, in addition to the named beneficiaries of the trust); and
          (g) Where a licensee has reasonable grounds for questioning the authenticity of the information supplied by a customer, conduct additional due diligence to confirm the above information.
          Amended: January 2007

        • FC-1.2.12

          For the purposes of Paragraph FC-1.2.11, acceptable means of undertaking such due diligence might include taking bank references; visiting or contacting the company by telephone; undertaking a company search or other commercial enquiries; accessing public and private databases (such as stock exchange lists); making enquiries through a business information service or credit bureau; confirming a company's status with an appropriate legal or accounting firm; or undertaking other enquiries that are commercially reasonable.

          Amended: January 2007

        • FC-1.2.13

          In cases where an investment firm licenseeG is providing investment management services to a regulated mutual fund, and is not responsible for receiving investors' funds being paid into the fund, it may limit its CDD to confirming that the administrator of the fund is subject to FATF-equivalent customer due diligence measures (see FC-1.6 for applicable measures). Where there are reasonable grounds for believing that investors' funds being paid into the fund are not being adequately verified by the administrator, then the investment firm licenseeG should consider terminating its relationship with the fund.

          Amended: January 2007

    • FC-1.3 Enhanced Customer Due Diligence: General Requirements

      • FC-1.3.1

        Enhanced customer due diligence must be performed on those customers identified as having a higher risk profile, and additional inquiries made or information obtained in respect of those customers.

      • FC-1.3.2

        The additional information referred to in Paragraph FC-1.3.1 might include documents (either in hard copy or electronic format) relating to the following:

        (a) Evidence of a person's permanent address through the use of a credit reference agency search or through independent verification by home visit;
        (b) A personal reference (e.g. by an existing customer of the licenseeG );
        (c) Another licensed entity's reference and contact with the concerned licenseeG regarding the customer;
        (d) Documentation outlining the customer's source of wealth;
        (e) Documentation outlining the customer's source of income; and
        (f) Independent verification of employment, or public position held.
        Amended: January 2007

      • FC-1.3.3

        In addition to the general Rule contained in Paragraph FC-1.3.1 above, special care is required in the circumstances specified in Sections FC-1.4 to FC-1.7 inclusive.

        Amended: January 2007

    • FC-1.4 Enhanced Customer Due Diligence: Non face-to-face Business and New Technologies

      • FC-1.4.1

        Investment firm licenseesG must establish specific procedures for verifying customer identity where no face-to-face contact takes place.

      • FC-1.4.2

        Where no face-to-face contact takes place, investment firm licenseesG must take additional measures (to those specified in Section FC-1.2), in order to mitigate the potentially higher risk associated with such business. In particular, investment firm licenseesG must take measures:

        (a) To ensure that the customer is the person they claim to be; and
        (b) To ensure that the address provided is genuinely the customer's.
        Amended: January 2007

      • FC-1.4.3

        There are a number of checks that can provide a licenseeG with a reasonable degree of assurance as to the authenticity of the applicant. They include:

        (a) Telephone contact with the applicant on an independently verified home or business number;
        (b) With the customer's consent, contacting an employer to confirm employment, via phone through a listed number or in writing; and
        (c) Salary details appearing on recent bank statements.
        Amended: January 2007

      • FC-1.4.4

        Financial services provided via post, telephone or internet pose greater challenges for customer identification and AML/CFT purposes. Investment firm licenseesG must establish procedures to prevent the misuse of technological developments in money laundering or terrorist financing schemes. Investment firm licenseesG must also ensure that they comply with any e-commerce laws and/or CBB Modules issued from time to time.

        Amended: January 2007

      • FC-1.4.5

        Investment firm licenseesG must identify and assess the money laundering or terrorist financing risks that may arise in relation to:

        (a) The development of new products and new business practices, including new delivery mechanisms; and
        (b) The use of new or developing technologies for both new and pre-existing products.
        Added: October 2014

      • FC-1.4.6

        For purposes of Paragraph FC-1.4.5, such a risk assessment must take place prior to the launch of the new products, business practices or the use of new or developing technologies. Investment firm licenseesG must take appropriate measures to manage and mitigate those risks.

        Added: October 2014

    • FC-1.5 Enhanced Customer Due Diligence: Politically Exposed Persons ('PEPs')

      • FC-1.5.1

        Investment firm licenseesG must have appropriate risk management systems to determine whether a customer or beneficial owner is a Politically Exposed Person ('PEP')G , both at the time of establishing business relations and thereafter on a periodic basis. Investment firm licenseesG must utilise publicly available databases and information to establish whether a customer is a PEPG .

        Amended: July 2016
        Amended: October 2014
        January 2007

      • FC-1.5.2

        Investment firm licenseesG must establish a clientG acceptance policy with regard to PEPsG , taking into account the reputational and other risks involved. Senior management approval must be obtained before a PEPG is accepted as a customer.

        Amended: January 2007

      • FC-1.5.3

        Where an existing customer is a PEPG , or subsequently becomes a PEPG , enhanced monitoring and customer due diligence measures must include:

        (a) Analysis of complex financial structures, including trusts, foundations or international business corporations;
        (b) A written record in the customer file to establish that reasonable measures have been taken to establish both the source of wealth and the source of funds;
        (c) Development of a profile of anticipated customer activity, to be used in on-going monitoring;
        (d) Approval of senior management for allowing the customer relationship to continue; and
        (e) On-going account monitoring of the PEP'sG account by senior management (such as the MLRO).
        Amended: January 2007

      • FC-1.5.3A

        In cases of higher risk business relationships with such persons, mentioned in Paragraph FC-1.5.1, investment firm licenseesG must apply the measures referred to in (b), (d) and (e) of Paragraph FC-1.5.3.

        Added: October 2014

      • FC-1.5.3B

        The requirements for all types of PEPG must also apply to family or close associates of such PEPsG .

        Added: October 2014

      • FC-1.5.3C

        For the purpose of Paragraph FC-1.5.3B, 'family' means spouse, father, mother, sons, daughters, sisters and brothers. 'Associates' are persons associated with a PEPG whether such association is due to the person being an employee or partner of the PEPG or of a firm represented or owned by the PEPG , or family links or otherwise.

        Added: October 2014

      • FC-1.5.4

        [This Paragraph was deleted in July 2016 as definition is included under Part B in the Glossary.]

        Deleted: July 2016
        Amended: October 2014
        January 2007

    • FC-1.6 Enhanced Due Diligence: Charities, Clubs and Other Societies

      • FC-1.6.1

        Financial services must not be provided to charitable funds and religious, sporting, social, cooperative, professional and other societies, until an original certificate authenticated by the relevant Ministry confirming the identities of those purporting to act on their behalf (and authorising them to obtain the said service) has been obtained. For Clubs and Societies registered with the General Organisation for Youth and Sports (GOYS), licenseesG must contact GOYS to clarify whether the account may be opened in accordance with the rules of GOYS.

        Amended: October 2014
        Adopted: July 2010

      • FC-1.6.2

        Investment firm licenseesG are reminded that clubs and societies registered with GOYS may only have one account with banks in Bahrain.

        Adopted: July 2010

      • FC-1.6.3

        Charities should be subject to enhanced transaction monitoring by licenseesG . Investment firm licenseesG should develop a profile of anticipated account activity (in terms of payee countries and recipient organisations in particular).

        Adopted: July 2010

      • FC-1.6.4

        Investment firm licenseesG must provide a monthly report of all payments and transfers of BD3,000 (or equivalent in foreign currencies) and above, from accounts held by charities registered in Bahrain. The report must be submitted to the CBB's Compliance Directorate (see FC-4.3 for contact address), giving details of the amount transferred, account name, number and beneficiary name account and bank details. Investment firm licenseesG must ensure that such transfers are in accordance with the spending plans of the charity (in terms of amount, recipient and country).

        Amended: January 2011
        Adopted: July 2010

    • FC-1.7 Enhanced Due Diligence: 'Pooled Funds'

      • FC-1.7.1

        Where investment firm licenseesG receive pooled funds managed by professional intermediaries (such as investment and pension fund managers, stockbrokers and lawyers or authorised money transferors), they must apply CDD measures contained in Section FC-1.8 to the professional intermediary. In addition, investment firm licenseesG must verify the identity of the beneficial owners of the funds where required as shown in Paragraphs FC-1.7.2 or FC-1.7.3 below.

        Adopted: July 2010

      • FC-1.7.2

        Where funds pooled in an account are not co-mingled (i.e. where there are 'sub-accounts' attributable to each beneficiary), all beneficial owners must be identified by the investment firm licenseeG , and their identity verified in accordance with the requirements in Section FC-1.2.

        Adopted: July 2010

      • FC-1.7.3

        For accounts held by intermediaries resident in Bahrain, where such funds are co-mingled, the investment firm licenseeG must make a reasonable effort (in the context of the nature and amount of the funds received) to look beyond the intermediary and determine the identity of the beneficial owners or underlying clients, particularly where funds are banked and then transferred onward to other financial institutions (e.g. in the case of accounts held on behalf of authorised money transferors). Where, however, the intermediary is subject to equivalent regulatory and money laundering regulation and procedures (and, in particular, is subject to the same due diligence standards in respect of its client base) the CBB will not insist upon all beneficial owners being identified provided the licenseeG has undertaken reasonable measures to determine that the intermediary has engaged in a sound customer due diligence process, consistent with the requirements in Section FC-1.8

        Adopted: July 2010

      • FC-1.7.4

        For accounts held by intermediaries from foreign jurisdictions, the intermediary must be subject to requirements to combat money laundering and terrorist financing consistent with the FATF Recommendations and the intermediary must be supervised for compliance with those requirements. The licenseeG must obtain documentary evidence to support the case for not carrying out customer due diligence measures beyond identifying the intermediary. The licenseeG must satisfy itself that the intermediary has identified the underlying beneficiaries and has the systems and controls to allocate the assets in the pooled accounts to the relevant beneficiaries. The due diligence process contained in Section FC-1.8 must be followed.

        Amended: October 2014
        Adopted: July 2010

      • FC-1.7.5

        Where the intermediary is not empowered to provide the required information on beneficial owners (e.g. lawyers bound by professional confidentiality rules) or where the intermediary is not subject to the same due diligence standards referred to above, a licenseeG must not permit the intermediary to open an account or allow the account to continue to operate, unless specific permission has been obtained in writing from the CBB.

        Adopted: July 2010

    • FC-1.8 Introduced Business from Professional Intermediaries

      • FC-1.8.1

        A licenseeG may only accept customers introduced to it by other financial institutions or intermediaries, if it has satisfied itself that the introducer concerned is subject to FATF-equivalent measures and customer due diligence measures. Where investment firm licenseesG delegate part of the customer due diligence measures to an introducer, the responsibility for meeting the requirements of Chapters 1 and 2 remains with the licenseeG , not the introducer.

        Amended: January 2018
        Amended: July 2010

      • FC-1.8.2

        Investment firm licenseesG may only accept introduced business if all of the following conditions are satisfied:

        (a) The customer due diligence measures applied by the introducer are consistent with those required by the FATF Recommendations;
        (b) A formal agreement is in place defining the respective roles of the licenseeG and the introducer in relation to customer due diligence measures. The agreement must specify that the customer due diligence measures of the introducer will comply with the FATF Recommendations;
        (c) The introducer immediately provides all necessary information required in Paragraphs FC-1.2.1 or FC-1.2.7 and FC-1.1.2A pertaining to the customer's identity, the identity of the customer and beneficial owner of the funds (where different), the purpose of relationship and, where applicable, the party/parties on whose behalf the customer is acting; also, the introducer has confirmed that the licenseeG will be allowed to verify the customer due diligence measures undertaken by the introducer at any stage; and
        (d) Written confirmation is provided by the introducer confirming that all customer due diligence measures required by the FATF Recommendations have been followed and the customer's identity established and verified. In addition, the confirmation must state that any identification documents or other customer due diligence material can be accessed by the licenseeG and that these documents will be kept for at least five years after the business relationship has ended.
        Amended: October 2014
        Amended: July 2010
        Amended: January 2007

      • FC-1.8.3

        The licenseeG must perform periodic reviews ensuring that any introducer on which it relies is in compliance with the FATF Recommendations. Where the introducer is resident in another jurisdiction, the licenseeG must also perform periodic reviews to verify whether the jurisdiction is in compliance with the FATF Recommendations.

        Amended: October 2014
        Amended: July 2010
        Amended: January 2007

      • FC-1.8.4

        Should the licenseeG not be satisfied that the introducer is in compliance with the requirements of the FATF Recommendations, the licenseeG must conduct its own customer due diligence on introduced business, or not accept further introductions, or discontinue the business relationship with the introducer.

        Amended: October 2014
        Amended: July 2010
        Amended: January 2007

    • FC-1.9 Shell Banks

      • FC-1.9.1

        Investment firm licenseesG must not establish business relations with banks which have no physical presence or 'mind and management' in the jurisdiction in which they are licensed and which are unaffiliated with a regulated financial group ('shell banks'). Investment firm licenseesG must not knowingly establish relations with financial institutions that have relations with shell banks.

        Amended: July 2010
        Amended: January 2007

      • FC-1.9.2

        Investment firm licenseesG must make a suspicious transaction report to the Financial Intelligence Unit and the Compliance Directorate if they are approached by a shell bank or an institution they suspect of being a shell bank.

        Amended: July 2010

    • FC-1.10 Simplified Customer Due Diligence

      • FC-1.10.1

        Investment firm licenseesG may apply simplified customer due diligence measures, as described in Paragraphs FC-1.10.2 to FC-1.10.8, if:

        (a) [This Subparagraph was deleted in January 2018].<
        (b) The transaction concerns the sale of a security listed on the Bahrain Bourse ('BHB'), and issued as a result of an initial public offering after January 2006, and the customer already holds an investor number, an allotment letter and a valid BHB Form 2 in place. Furthermore, the BHB should have advised the broker (by circular) that all necessary customer due diligence information and copies of all original identification documents will be made available upon request without delay;
        (c) The customer is a company listed on a GCC or FATF member state stock exchange with equivalent disclosure standards to those of the BHB;
        (d) The customer is a financial institution whose entire operations are subject to AML/CFT requirements consistent with the FATF Recommendations and it is supervised by a financial services supervisor in a FATF or GCC member state for compliance with those requirements;
        (e) The customer is a financial institution which is a subsidiary of a financial institution located in a FATF or GCC member state, and the AML/CFT requirements applied to its parent also apply to the subsidiary;
        (f) The customer is the Bahrain Monetary Agency ('CBB'), the BHB or a licenseeG of the CBB; or
        (g) The customer is a Ministry of a Gulf Cooperation Council ('GCC') or Financial Action Task Force ('FATF') member state government, a company in which a GCC government is a majority shareholder, or a company established by decree in the GCC.
        Amended: January 2019
        Amended: January 2018
        Amended: October 2014
        Amended: July 2010
        Amended: January 2007

      • FC-1.10.2

        For customers falling under category (b) in Paragraph FC-1.10.1, the customer's name and contact information must be recorded. However, the verification, certification and due diligence requirements (contained in Paragraphs FC-1.2.3, FC-1.2.5, FC-1.2.8, FC-1.2.9 and FC-1.2.11), may be dispensed with.

        Amended: July 2018
        Amended: July 2010

      • FC-1.10.3

        [This Paragraph was deleted in July 2018].

        Deleted: July 2018
        Amended: July 2010
        Amended: January 2007

      • FC-1.10.4

        For customers falling under categories (c) to (g) in Paragraph FC-1.10.1, the information required under Paragraph FC-1.2.1 (for natural persons) or FC-1.2.7 (for legal entities) must be obtained. However, the verification, certification and due diligence requirements (contained in Paragraphs FC-1.2.3, FC-1.2.5, FC-1.2.8, FC-1.2.9 and FC-1.2.11), may be dispensed with.

        Amended: July 2010

      • FC-1.10.5

        Investment firm licenseesG wishing to apply simplified due diligence measures as allowed for under categories (c) to (g) of Paragraph FC-1.10.1 must retain documentary evidence supporting their categorisation of the customer.

        Amended: July 2010
        Amended: January 2007

      • FC-1.10.6

        Examples of such documentary evidence may include a printout from a regulator's website, confirming the licensed status of an institution, and internal papers attesting to a review of the AML/CFT measures applied in a jurisdiction.

        Amended: July 2010

      • FC-1.10.7

        Investment firm licenseesG may use authenticated SWIFT messages as a basis for confirmation of the identity of a financial institution under FC-1.10.1(d) and (e) where it is dealing as principal. For customers coming under Paragraph FC-1.10.1(d) and (e), investment firm licenseesG must also obtain and retain a written statement from the parent institution of the subsidiary concerned, confirming that the subsidiary is subject to the same AML/CFT measures as its parent.

        Amended: July 2010

      • FC-1.10.8

        Simplified customer due diligence measures must not be applied where a licenseeG knows, suspects, or has reason to suspect, that the applicant is engaged in money laundering or terrorism financing or that the transaction is carried out on behalf of another person engaged in money laundering or terrorism financing.

        Amended: July 2010

      • FC-1.10.9

        [This Paragraph was deleted in July 2018].

        Deleted: July 2018
        Amended: July 2010

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