Customer due diligence

Understand customers, ownership and verification.

Customer due diligence is the work of knowing who a customer is, who owns and controls it, and whether the information you collected can be verified. The first guides explain the difference between collecting and verifying, and how KYC, KYB and CDD relate.

Ownership and control are treated in their own guides because they are the part most people find hardest. The customer-type guides then walk through companies, trusts, partnerships, associations, government bodies and nominee arrangements, each with the questions to settle before a relationship starts.

• Initial customer due diligence

  Initial customer due diligence (CDD) checks the customer, the persons involved and the purpose of the service.

• Collect and verify customer information

  KYC collection records information. Verification uses suitable evidence to establish the relevant facts.

• Identify beneficial owners

  Find the individuals who ultimately own or control a non-individual customer.

• Ownership and control are different

  A share percentage does not explain every way a person can control an entity.

• Company customer checks and KYB

  Separate company existence, authority, ownership and business purpose.

• Trust customer checks

  Map the trust's roles and powers before deciding what the evidence establishes.

• Identify a person without standard ID

  When a person cannot provide standard identity documents, a careful alternative process may still complete initial CDD.

• How KYC, KYB and CDD differ

  KYC concerns customer information. KYB describes business checks. CDD includes identity, customer risk and the wider customer relationship.

• When existing customers need CDD

  A previous relationship does not create one general CDD exemption. The customer’s category, earlier checks and later changes determine the next steps.

• Customer checks for partnerships

  Identify the partnership, its governing powers and the people who own, control or represent it. A partnership name alone does not complete CDD.

• Customer checks for associations and non-profits

  A non-profit purpose does not identify the customer’s legal structure. Use the CDD requirements for the association, company, trust or other structure involved.

• Customer checks for government bodies

  Establish the government body’s identity and its representative’s authority. Government status changes some beneficial-owner checks but not all CDD.

• Nominee shareholders and directors

  A nominee can act for another person. Ownership checks must examine the underlying arrangement and actual control, not only the name in a register.