Client On-boarding Guidance

1.    Introduction:

ibanex undertake KYC on all new clients. This is to adhere to regulatory obligations which are required by law, and also to help mitigate the risks associated with criminals attempting to use our products to launder money or commit fraud.

For this reason, before we can on-board a new client we will require certain information to meet both regulatory and internal obligations. The list below is intended to act as a guide to assist in understanding these requirements; why we request the information and the documentation that can evidence it. Different client types require the verification of different criteria.

1.1.

For Corporate clients we need to identify and verify the following:

• Client Identification including:
  • Registered name
  • Trading name (if applicable)
  • Company number
  • Registered Address
  • Trading Address (if applicable)
  • Directors Identity
• Purpose of Account
• Nature of Business
• Company Financials
• Source of Funds
• Ultimate Beneficial Ownership

1.2.

• For Individual clients we need to identify and verify the following:
• Client Identification Including:
  • Full Name: forename, middle name(s) and surname
  • Date of Birth
  • Residential Address
• Purpose of Account
• Source of Funds

1.3.

• For Sole Trader clients we need to identify and verify the following:

• Client Identification Including:
  • Registered Address
  • Trading name
  • VAT Number
  • Sole Trade Identity
• Purpose of Account
• Nature of Business
• Company Financials
• Source of Funds

The following is a breakdown of each criteria, what it is, why we are asking and what you can provide to evidence it.

2.    Key requirements for Client on-Boarding

2.1.                   Purpose of Account

What?

We need to have a clear understanding of the purpose that the account with us will be used for e.g. the client should confirm if the account is intended for operations, payment of invoices/suppliers, repatriation of overseas earnings etc.

Why?

This allows us to understand their business and the reasons behind their payments to ensure correct alignment with our products and services.

How?

There is a field on the online application form that requests information on the reason behind future transactions. Often the client does not complete this section with enough detail, which means that further clarification is sought during the on-boarding process.

It is best practice for the client to provide as much detail as possible, as this will allow us to fully understand how the account will be used and what the account will be used for. A common reason that is received is “converting currencies to send overseas”, this does not describe in enough detail the exact account usage so further information is likely to be required.

2.2.                   Client Identification

What?

We are required to verify the identity of all of our clients. For corporate clients this entails verifying at least two directors and for private clients this simply entails verifying the individuals.

Why?

This is to ensure that we are confident in knowing the identity of the individuals we are entering a business relationship with, and to confirm they are who they say they are. It is also a legal requirement for us to comply with money laundering obligations and screen the individuals against international Politically Exposed Person (PEP) and sanctions lists.

How?

If the client is UK based there is a chance that we will be able to verify the client’s identity via our Electronic Identification (EID) software. To allow us to be able to perform this check we will require the client’s full name, Date of Birth and residential address. The information required to perform this check is requested on the initial online application form. If a request for documentation is sent this may mean that the check has failed to verify the individual or the information provided to us is not accurate. In the case of corporate clients, where the electronic check has failed, it may be possible for us to try and verify an additional director, where there are multiple.

Please note that if we are unable to electronically verify an individual or they are based outside of the UK, we will require the following:

Document Standards

• For individuals please provide full, in date, documents with all the required information clearly We accept scanned copies, photos of the original or online versions of documents e.g. bank statements/ utility bills; no scans of scans.
• The name, DOB and address detailed on these documents must be the same as provided on the application form.
• ID Documents must be within the validity date shown on the document
• Proof of address documents must be dated within 3 months from the date ibanex receive the application

2.3. Nature of Business (for corporate clients only)

What?

We are required to understand their nature of business and the products or services that each of our client’s offers.

Why?

This enables us to have a full understanding of their business activities and the types of clients they are servicing. There are also certain industries that fall outside of our risk appetite that we need to identify (see section 4.1. Prohibited Industries) . If they have a website, this information may be clear, but if not, we will require additional documents to help aid our understanding.

How?

Document Standards

• For documentary evidence please ensure that the client is clearly referenced, and the products and/or services are clearly

2.4. Company Financials (for corporate clients only)

What?

We are required to ensure that clients have funds available, or at least prospective funds in place that will allow them to fund their account.

Why?

Company financials are required to evidence that the business is operating as expected rather than as a “front company” used for the purpose of money laundering. This is intended to satisfy some of the perceived AML risk associated with the account, rather than checking to see if they have the liquidity in place to fulfil their trades.

How?

Document Standards:

• For documents that have not been submitted to a recognised government authority, supporting documents must be specific to the client and signed by a company
• Dated within the last 3 months, clearly showing the client’s transactional

2.5. Source of Funds/ Source of Wealth

What?

Source of Funds refers to the origin of the funds involved in the business relationship or transaction. It refers to the activity that generated the funds, e.g. sale of business goods or salary payments.
Source of Wealth for individual clients is distinct from Source of Funds and describes the activities that have generated the total net worth of an individual.

We have an obligation to collect information in order to understand and, where necessary, verify or corroborate Source of Funds and Source of Wealth of our clients.

Why?

This is to help us understand where the client’s money has originated from and that the client has not earned or otherwise acquired their wealth or the funds from the proceeds of criminal activity.

How?

Document Standards:

• Please provide full signed documents that clearly reference the client and associated amounts. The document must be specific and in relation to the source of funds used for this

2.6. Control & Beneficial Ownership (for corporate clients only)

What?

We have an obligation to fully identify the ‘ultimate beneficial owners’ and ‘controllers’ of the client company. In cases where there are intermediary entities that sit within the ownership chain of another corporate entity, we are also required to identify those individuals, up until a certain percentage. The ownership percentage that we verify is up to 10%.

Why?

This is a legal requirement – where there are intermediary entities, it means we need to trace to the top of the company tree until we are able to identify the individual or individuals who are behind the company and benefit from or have control over the funds that will be processed through us.

How?

Note   –   where   certain   relationships   pose   a   higher   risk   e.g.   Politically   Exposed   Persons   or   certain   jurisdictions, there  may  be  additional   checks,   documentation   or   questions   required.   The   above   list   is   intended   to   act   as guidance and is not exhaustive.

3. Jurisdictions

ibanex has restricted the countries that it will service, at both the client level and at the payer level.

3.1. Permitted Jurisdictions:

Neither our client or our client’s clients (ultimate payer) should be based outside of the below jurisdictions. Any payments with a payer outside of the permitted jurisdiction will be failed automatically by our transaction monitoring system at the point of processing.

ibanex accepts clients and funds located in the following jurisdictions:

United Arab Emirates is also available on request.

3.2. Prohibited Jurisdictions:

There are some countries that ibanex will not have any dealings with (including payments to). The following are a list of jurisdictions which ibanex are unable to accept funds from or make payments to:

• Cuba
• Iran, Islamic Republic of
• Libya
• Korea, Democratic People’s Republic of
• South Sudan
• Sudan
• Syria

4. Prohibited Industries

As part of our ongoing commitment to mitigate the risk of money laundering & terrorist financing, ibanex has placed a number of restrictions on the type of industries, activities and countries we are able to support and service. Failure to comply with these restrictions can result in delayed or rejected payments; with continuous breaches leading to account closure.

4.1. Prohibited Industries:

• Unregistered Charities –     Adult Content & Services
• Weapons & Defence –     Drug Paraphernalia
• Multi-Level Marketing –     Shell Banks
• Pawnbrokers –     Shell Companies
• Political Groups –     Carbon Credits
• Precious Metal Groups –     Crypto Currencies
• Speculative Trading –     Gambling
• Illegal Products & Services –     Counterfeit Goods
• Companies with Offices/ Operations in Prohibited Jurisdictions

The above list is accurate as of October 2018 but may be updated from time to time (please also see the following link):

5. Document Availability by Client Profile and Jurisdiction

ibanex utilise both publicly available sources/ databases as well as third party sources which, in some instances, allow us to source and verify certain pieces of information in relation to our clients. Due to certain restrictions on these sources for most jurisdictions outside of the UK the information available to us is limited; it is cases like this that we will require the client themselves to provide us with any information/ documentation that is required.

The table below is intended to act as a guide as to the likelihood of ibanex being able to obtain information from our online sources/ databases.

• UK

• Europe

• Rest of the World