CBB Volume 5: Contents

Central Bank of Bahrain Volume 5—Specialised Licensees
Common Modules (Applicable to all Specialised Licensees)
Part A
Business Standards
FC Financial Crime
FC-1 Customer Due Diligence
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Location: Central Bank of Bahrain Volume 5—Specialised Licensees > Common Modules (Applicable to all Specialised Licensees) > Part A > Business Standards > FC Financial Crime > FC-1 Customer Due Diligence > FC-1.1 General Requirements > Verification of Identity and Source of Funds > FC-1.1.2
  • Verification of Identity and Source of Funds

    • FC-1.1.1

      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 licensee'sG Board of Directors. They must be strictly adhered to.

      October 2010

    • FC-1.1.2

      LicenseesG must implement the customer due diligence measures outlined in Chapters 1, 2 and 3 when:

      (a) [This Sub-paragraph was deleted in July 2018];
      (b) Carrying out wire transfers (of the equivalent of US$1,000 or above) (particularly relevant for money changers);
      (c) Establishing business relations with a new or existing customer;
      (d) A change to the signatory or beneficiary of an existing account or business relationship is made;
      (e) CustomerG documentation standards change substantially;
      (f) The licenseeG has doubts about the veracity or adequacy of previously obtained customer due diligence information;
      (g) A significant transactionG takes place (see FC-2.2.3);
      (h) 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
      (i) There is a suspicion of money laundering or terrorist financing.
      Amended: July 2018
      October 2010

    • FC-1.1.2A

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

      Added: October 2017

    • FC-1.1.2B

      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 or 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.
      Added: October 2017

    • FC-1.1.3

      Representative office licenseesG are not allowed to undertake business directly with customersG . However, they may be assigned by the Head Office to contact new or existing customersG on their behalf, in this case they must pay regard to (c) – (f) and (h-i) customer due diligence measures listed under FC-1.1.2 above.

      October 2010

    • FC-1.1.4

      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 1.10. For the representative office licenseesG , 'customer' includes customers of the HO that the Representative office liaises with for general purposes. Examples might include general inquiries and inquiries regarding the accuracy of customer information.

      October 2010

    • FC-1.1.5

      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 and in the Guidance Notes (See Supplementary Information, FC-7 in Part B of the Rulebook). Enhanced requirements apply under certain high-risk situations: these requirements are contained in Sections FC-1.3 to FC-1.9 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-1.7. Simplified customer due diligence measures may apply in defined circumstances: these are set out in Section FC-1.10.

      October 2010

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