Answer
Regulation 5 says that customer due diligence comprises:
- Identifying the client and verifying their identity on the basis of documents, data or information obtained from a reliable and independent source.
- Identifying where there is a beneficial owner who is not the customer, the beneficial owner and taking adequate measures, on a risk sensitive basis, to verify his identity so that you are satisfied that you know who the beneficial owner is. This includes understanding the ownership and control structure of a legal person, trust or similar arrangement.
- Obtaining information on the purpose and intended nature of the business relationship.
Identification of a client or a beneficial owner is simply being told or coming to know a client's identifying details, such as their name and address. Verification is obtaining some evidence which supports this claim of identity.
For further information and definition of beneficial owner, please refer to Chapter 4 of the Law Society's Anti-money laundering practice note.
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While every effort has been made to ensure the accuracy of the information provided by the Practice Advice Service, it does not constitute legal advice and cannot be relied upon as such. The Law Society does not accept any responsibility for liabilities arising as a result of reliance upon the information given.