Assignment 4

AML. Companies that are owned by a country (“state owned “companies), and companies that are in
the stock market.
1. What is Know Your Customer in banking?
KYC, otherwise known as “Know Your Customer” is a set of procedures for verifying a customer’s identity
before or while doing business with banks and other financial institutions. Compliance with KYC regulations
can help keep money laundering, terrorism financing, and more run-of-the-mill fraud schemes at bay. By first
verifying a customer’s identity and intentions at the time of account opening and then understanding their
transaction patterns, financial institutions are able to more accurately pinpoint suspicious activities.
2. What is the beneficial owner in accordance with the EU AML Directives?
According with EU AML directives the beneficial owner is a natural person on whose behalf a business
relationship is established, or a transaction conducted. Furthermore, this person owns or control, directly or
indirectly, more than 25 percent of the share capital or voting rights of a legal person, or who through
agreements or statutory provisions or other means exercise direct or indirect control in the management of a
legal person.
Case 1 (Amazon)
a) I will apply to this client Simplified Due Diligence because Amazon is a public company listed on stock
exchange (market).
b) I consider it a low-risk client due de fact that Amazon is the biggest public company in world at the
moment and their activity is known by everyone.
c) As Amazon is a legal person, I will require documents evidencing their existence, company name, legal
form, registered address, identity of their directors, articles of association and tax identification number.
d) I will contact Amazon’s managers in case I need more information which may not be available on their
official site.
Case 2 (Mining company from South Africa)
a) Due diligence measures I would take will be linked with requiring information and documentation
necessary to determine the ownership or control structure of company, source of funds and wealth, etc.
b) I will consider it a high-risk client because although the company is from South Africa, we don’t have
any information about beneficial owners who has 25% of the shares of company. Besides, we don’t
know in what countries are established those companies and in what activities they are involved.
c) I don’t think South Africa is a high-risk jurisdiction because she is not part of AML third countries risk list
or OFAC sanctions list.
 The situation when the CEO of the mining company has been charged with an insider trading offence
it’s relevant for my bank because if he will be found guilty bank using due diligence measures can
refrain from establishing or maintaining the business relationship with his company.
Case 3 (Company owned by government of Chile)
a) To update the information about my client, I will collect documents related with company activities,
transactions, identity of their directors, etc.
b) I will take due diligence measures requesting information and some documents about my client.
c) Due the fact that Chile isn’t mentioned either in AML third countries list or in OFAC sanctions list I
wouldn’t consider Chile a high-risk country.
Biography:
https://www.sepblac.es/wp-content/uploads/2018/03/royal_decree_304_2014.pdf
https://www.youtube.com/watch?v=E1xiACxS-eQ&t=13s