illustrative customer due diligence templates · pdf fileform b for senior managing officials...

Implementation Guidance EP 200 IG 2

Anti-Money Laundering and Countering the Financing

of Terrorism – Requirements and Guidelines for

Professional Accountants in Singapore

Illustrative Customer Due Diligence

Templates

This Implementation Guidance (IG) was issued by the Council of

the Institute of Singapore Chartered Accountants (ISCA) in

November 2015.

EP 200 IG 2

2

ANTI-MONEY LAUNDERING AND COUNTERING THE FINANCING OF TERRORISM – REQUIREMENTS AND GUIDELINES FOR

PROFESSIONAL ACCOUNTANTS IN SINGAPORE

ILLUSTRATIVE CUSTOMER DUE DILIGENCE TEMPLATES

CONTENTS

Pages Customer Due Diligence Flowchart .................................................................................. 4

Main Form for Natural Persons and Sole Proprietorships ................................................. 56

Main Form for Legal Persons ........................................................................................... 78

Form A for Beneficial Owners .......................................................................................... 910

Form B for Senior Managing Officials 1112

Form C for Individuals with Executive Authority/Agents 1314

Form D for Politically Exposed Persons 1516

Risk Assessment Form .................................................................................................... 1721 Approval Form for High-Risk Engagements 22 Main Form for Higher Risk Clients 23

EP 200 IG 2

3

Introduction

The Institute of Singapore Chartered Accountants (ISCA) issued the new Ethics Pronouncement (EP) 200, Anti-Money Laundering and Countering the Financing of Terrorism – Requirements and Guidelines for Professional Accountants in Singapore, in October 2014. This pronouncement has also been adopted by the Accounting and Corporate Regulatory Authority (ACRA) and is applicable to public accountants and accounting entities registered under the Accountants Act who are regulated by ACRA. The comprehensive requirements relating to anti-money laundering (AML) and countering the financing of terrorism (CFT) contained in the new pronouncement are benchmarked to international best practices and the latest "International Standards on Combating Money Laundering and the Financing of Terrorism & Proliferation” issued by the Financial Action Task Force (FATF Recommendations). The pronouncement was developed by an ISCA Working Group comprising representatives from across the public accounting sector and in consultation with the relevant regulators such as the Monetary Authority of Singapore, ACRA and the Commercial Affairs Department of the Singapore Police Force. With the objective of supporting the accountancy profession to implement the controls and procedures required in EP 200, ISCA has developed EP 200 Implementation Guidance (IG) 2 – Illustrative Customer Due Diligence (CDD) Templates to assist professional accountants and professional firms, specifically in the area of customer due diligence. The templates and questionnaires provided in EP 200 IG 2 are not prescriptive and should be tailored and adapted for use, as appropriate for the professional firm’s purposes. Professional firms remain fully responsible for ensuring compliance with AML and CFT requirements.

EP 200 IG 2

4

CUSTOMER DUE DILIGENCE (CDD) FLOWCHART AND TEMPLATES AND RISK ASSESSMENT TEMPLATES The flowcharts, templates and forms provided in EP 200 IG 2 are illustrations that firms providing the services listed in paragraph 1.5 of EP 200 may refer to. As they relate to the services listed in paragraph 1.5 of EP 200, the CDD measures are more robust and may be referred to as a best practice guide for professional firms engaged to perform other types of services. The templates and forms are not prescriptive and should be tailored and adapted as needed in the professional firm’s professional judgment. Information for internal office use are marked with the “○” symbol.

The following flowchart illustrates how the CDD process is carried out.

Yes

No

No

For natural person(s): Complete CDD form

on pages 5-6.

For legal person(s): Complete CDD form on

pages 7-8.

Obtain senior management approval using

the form on page 22 prior to completing the

Enhanced CDD form found on page 23

Not low risk

Does the client qualify for any of the exemptions

found in Annex 1 (page 24)?

Verify the information obtained using the normal

CDD checklist. Upon successful verification,

proceed with client onboarding.

Conduct risk assessment using the

form found on pages 17-21

For each agent that the client has, complete

Form C (pages 13-14).

Is there one or more politically exposed

person(s) involved?

For each PEP, complete Form D (pages 15-

16)

For each beneficial owner that the client has,

complete Form A (pages 9-10).

(For legal persons) If no beneficial owner is

identified, complete Form B (pages 11-12)

Normal

Yes

Verify the information obtained using the

enhanced CDD checklist. Upon successful

verification, proceed with client onboarding.

EP 200 IG 2

5

Information to be Obtained from Client

Information collected in this form should be verified. Verification can be done subsequent to completing

risk assessment.

Identification

FOR NATURAL PERSONS/SOLE PROPRIETORSHIPS ONLY

Full legal name(s), both official and any aliases:

Unique identification number:

Contact number(s):

Nationality:

Date of birth:

Residential street address:

Address of principal place of business (if different from above):

Intended nature and purpose of the business relationship:

Name of beneficial owner(s):

(Please complete Form A for each beneficial owner.)

Name of person(s) with executive authority:

(Please complete Form C for each person with executive authority.)

Additional information required

Question Response

Are you, or any party connected to you, a politically exposed person? Yes (Please complete Form D for each PEP)

No

What country is your business based in?

What type of products does your business sell or manufacture? Please provide further details in the box below if necessary.

Any further details:

MAIN FORM

(For natural persons

and sole

proprietorships)

EP 200 IG 2

6

Client/Agent’s Declaration

I declare that the information provided in these forms is true and correct. I am aware that I may be subject to prosecution and criminal sanctions under written law if I am found to have made any false statement which I know to be false or which I do not believe to be true, or if I have intentionally suppressed any material fact.

Name of client/agent:

Identity/passport number:

Date:

Signature:

○ Verification (for office use)

Professional judgment must be exercised in determining if verification of identity should be that of “Normal

CDD” or “Enhanced CDD” standards, depending on the risk assessment performed on the client.

For Normal CDD, the following documents can be used to verify the client’s identity:

Copy of screening results from a reliable independent database (e.g., Thomson Reuters World-Check, Dow Jones Risk and Compliance database) of the client

☐

Copy of passport or identification card (for Singaporeans and Singaporean Permanent Residents only)

☐

A document containing the address of the individual (e.g., a bank statement or a recent utility bill) ☐

MAIN FORM

(For natural persons

and sole

proprietorships)

EP 200 IG 2

7

Information to be Obtained from the Client

Identification

FOR LEGAL PERSONS ONLY

Full legal name of registration:

Contact number(s):

Business type: Partnership / Limited Liability Partnership / Corporation* Other: *delete where inapplicable

Registration number/incorporation number:

Country of incorporation or registration:

Registered address:


Intended nature and purpose of the business relationship:

Names of the directors or partners:

Name of beneficial owner(s):

(Please complete Form A for each beneficial owner. Where a beneficial owner cannot be identified, please complete Form B instead.)

Name of person(s) with executive authority:

(Please complete Form C for each person with executive authority.)

Additional information required

Question Response

Are you, or any party connected to you, a politically exposed person? Yes (Please complete Form D for each

PEP)

No

What country is your business based in?

What type of products does your business sell or manufacture? Please provide further details in the box below if necessary.

Any further details:

MAIN FORM

(For legal persons)

EP 200 IG 2

8

Client/Agent’s Declaration I declare that the information provided in these forms is true and correct. I am aware that I may be subject to prosecution and criminal sanctions under written law if I am found to have made any false statement which I know to be false or which I do not believe to be true, or if I have intentionally suppressed any material fact.



Date:

Signature:


Professional judgment must be exercised in determining if verification of identity should be that of “Normal

CDD” or “Enhanced CDD” standards, depending on the risk assessment performed on the client.

For Normal CDD, the following documents can be used to verify the client’s identity:

Copy of screening results from a reliable independent database (e.g., Thomson Reuters World-Check, Dow Jones Risk and Compliance database) of the client

☐

Memorandum and Articles of Association ☐

ACRA profile of the company or incorporation or registration documents from a regulatory body (for foreign firms) or certificate of incorporation (for foreign firms)

☐

Information documenting the ownership and control structure of the entity (e.g., ownership chart signed by a director.)

☐

MAIN FORM

(For legal persons)

EP 200 IG 2

9

Form A: Beneficial Owners

For each beneficial owner that the client has, please complete the following form. Certain clients do not

need to fill up this form. Please refer to Annex 1 for a list of these clients.

If an ACRA search profile of the shareholders have been obtained, it is not necessary to verify the identity

of the shareholders/partners further. A shareholder may be a beneficial owner if the shareholder

ultimately owns or controls more than 25% of shares in the company.

Identification

BENEFICIAL OWNER



Contact number(s):

Occupation:

Nationality:

Date of birth:


Information regarding the nature of beneficial ownership and the ownership and control structure of the client:

*If the beneficial owner is a PEP, Form D must be completed in addition to this form.





Date:

Signature:

FORM A

(Identification and

verification of

beneficial owners)

EP 200 IG 2

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Verification of the identity of beneficial owners is to be done on the basis of risk. Reasonable measures

should be taken to verify the identity of the beneficial owners. For example, the following documents can

be collected:

Copy of screening results from a reliable independent database (e.g., Thomson Reuters World-Check, Dow Jones Risk and Compliance database) of the beneficial owner

☐


☐

FORM A

(Identification and

verification of

beneficial owners)

EP 200 IG 2

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Form B: Senior Managing Officials

In the event that no natural persons are identified as the beneficial owners, this form should be completed to identify and verify the identity of the relevant natural person(s) holding the position of senior managing official(s). Identification

SENIOR MANAGING OFFICIAL 1



Contact number(s):

Occupation:

Nationality:

Date of birth:


*If the senior managing offical is a PEP, Form D must be completed in addition to this form.





Date:

Signature:

FORM B

(For senior

managing officials)

EP 200 IG 2

12


Verification of the identities of senior managing officials is to be done on the basis of risk. Reasonable

measures should be taken to verify the identity of the beneficial owners. For example, the following

documents can be collected:

Copy of screening results from a reliable independent database (e.g., Thomson Reuters World-Check, Dow Jones Risk and Compliance database) of the senior managing official

☐


☐

FORM B

(Senior managing

officials)

EP 200 IG 2

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Form C: Individuals with Executive Authority/Agents

Where a person purports to act on behalf of a client, the professional firm shall identify and verify the

identity of the person and shall verify that the person is so authorised by completing this form.

Identification

FOR AGENTS WHO ARE INDIVIDUALS ONLY



Contact number(s):

Occupation:

Nationality:

Date of birth:



FOR AGENTS WHO ARE LEGAL PERSONS

Full legal name of registration:

Incorporation number or registration number:

Contact number(s):

Place of incorporation or registration:

Date of incorporation or registration:

Registered address:


*If the agent is a PEP, Form D must be completed in addition to this form.

FORM C

(Agents)

EP 200 IG 2

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Date:

Signature:


The authority of an agent to act on behalf of the client shall be verified. This may be done by obtaining

documentary evidence that the client has appointed the agent to act on his behalf or a summary of the

oral instructions given to the agent by the client; and the specimen signatures of the person appointed.

FORM C

(Agents)

EP 200 IG 2

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Form D: Politically Exposed Persons (PEPs)

Where there is one or more PEPs involved, this form must be completed. Please use a separate form for

each PEP.

Identification

FOR POLITICALLY EXPOSED PERSON(S) ONLY:

Name of PEP:

Nature of prominent public function that the PEP is or has been entrusted with

1:

Name of public function:

Country:

Period of service:

PEP relationship with the client:

Self

Family member (Spouse / Child / Parent / Child’s Spouse*)

Close associate

Ultimate beneficial owner / shareholder / director / partner / authorized person* of client

Others (please specify): *delete where inapplicable

Source(s) of wealth: Approximate Amount (SGD)

Select where appropriate Net Worth Annual Income

Operating income

From shareholders

From group companies

Investment

Credit facilities

Others (please specify):

Source of funds:

1 For example, as a domestic politically exposed person, a foreign politically exposed person, or a politically exposed person of an

international organisation.

FORM D

(PEP)

EP 200 IG 2

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Date:

Signature:


Documents required for verification

Copy of screening results from a reliable independent database (e.g., Thomson Reuters World-Check, Dow Jones Risk and Compliance database) of the PEP

☐

A document containing the address of the PEP (e.g., a bank statement or a recent utility bill) ☐ Documents verifying the source of funds and wealth

2 ☐

Copy of passport or identification card (for Singaporeans only) ☐

Any published convictions, penalties and sanctions involving the PEP ☐

2 Examples of independent verification measures include citing public information sources (e.g. company websites, corporate

registration websites, journals and media reports) to verify net worth as well as obtaining documentary evidence, such as bank statements, confirmation from third party professionals (e.g. tax advisors), and financial statements or management accounts of operating companies. Professional firms should also assess the authenticity and reliability of the documents provided by the

clients. More evidentiary verification options are typically required for higher-risk clients. Aside from the common verification measures such as citing public information sources, some institutions commission independent investigations to perform background checks on higher-risk PEPs, obtain financial statements of the business(es) where the source of wealth/funds is

derived, and perform site visits.

FORM D

(PEP)

EP 200 IG 2

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Anti-Money Laundering / Countering the Financing of Terrorism (AML/CFT) Risk Assessment Form

For existing clients only (leave this field blank if not applicable): Response

Routine review of existing client

Yes

No

Review as a result of a trigger event – Please indicate the trigger event: Yes

No

For new clients only (leave this field blank if not applicable): Response

Referred client – Please indicate source of referral below: Yes

No

Please provide details regarding the nature of services required by client3:

Establishing or continuing business relationship with the client is NOT allowed if the answer to any of the questions below is "NO."

Question Response

For new client, up-to-date and relevant client identification information, including information on shareholders and directors, has been obtained as per Page 1.

Yes

No N/A

For existing client, no doubt arises as to the veracity or adequacy of the evidence previously obtained for the purposes of client identification; otherwise, client identification information has been re-verified.

Yes

No N/A

Client and connected parties4 DO NOT MATCH with terrorist suspects

and/or special interest entities in reliable, independent screening databases

5.

Yes

No

Client and connected parties DO NOT MATCH with any of the names under the list of names under the applicable Schedules of the Terrorism (Suppression of Financing) Act (Cap. 325) and United Nations sanctioned entities.

Yes No

If the answer to any of the following questions is "Yes”, the business relationship must be either terminated or declined. If the answer is “No”, the risk level is “Normal” and you may proceed to the risk assessment questionnaire.

Question Response

The ownership of the client is unable to be verified (i.e. comparing information based on documents).

Yes No

3 Certain services are subject to additional requirements under the Ethics Pronouncement 200 and CSP Guidelines. Please see

Annex 2 for a list of these services. 4 Connected parties may be family members or close associates (e.g. individuals closely connected either socially or professionally).

5 Possible databases you may use are Accuity Compliance, Thomson Reuters W orld-Check, Dow Jones Risk & Compliance

Database and Truth Technologies’ Sentinel.

EP 200 IG 2

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Risk Assessment Questionnaire Section 1: Client background

Question Response

Client or beneficial owners6 or directors is a Politically Exposed Person

(PEP). Yes

No

Client or beneficial owner or directors is matched with a person in the MAS control list. The issues are related to predicate crimes for money laundering and/or fraud and/or crime (including suspected cases).

Yes

Yes

No

No

Client or beneficial owner or connected party has adverse news based on searches from Factiva and/or Google. The issues are related to predicate crimes for money laundering and/or fraud and/or crime (including suspected cases).

Yes

Yes

No

No

Client is involved in High-Risk Industry7. Yes No

Client has nominee shareholder/s in the ownership chain where there is no legitimate rationale. The nominee shareholder/s represent/s majority ownership

Yes

Yes

No

No

Client is: - a shell company or has complex shareholding structure (e.g.,

involving 3 layers or more of ownership structure, different jurisdictions, trusts); AND

- without an obvious commercial purpose.

Yes No

Client is a charitable or non-profit organization that is NOT registered in Singapore (charities.gov.sg/charity/index.do).

Yes No

Section 2: Client Location Please consider as applicable: Client nationality; Place of formation/incorporation; Residential address; Permanent address; Place of operation; Place where business is established.

Question Response

Client or beneficial owner or beneficiary is connected to high risk jurisdictions

8 in any of the above listed aspects.

Yes No

Client or beneficial owner or beneficiary is connected to a jurisdiction not in a low risk country

9.

Yes No

6 A beneficial owner refers to the natural person who ultimately owns or controls a client and/or the natural person on whose behalf

a transaction is being conducted. It also includes those persons who exercise ultimate effective control over a legal person or arrangement. 7 As determined by the firm, such as with reference to publications and guidance issued from time to time by the FATF.

8 Refer to the FATF list of high-risk and non-cooperative jurisdictions to determine which countries are high-risk jurisdictions:

http://www.fatf-gafi.org/topics/high-riskandnon-cooperativejurisdictions/ 9 Determining whether a country is low-risk should be based on the firm’s internal policy and your professional judgment. Reference

should be made to the FATF list of high-risk countries as well.

EP 200 IG 2

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Section 3: Client Meeting

Question Response

Client relationship is established through a non-face-to-face approach. Yes No

Client relationship is established through online, postal or telephone, where non face to face approach is used.

Yes No

Client relationship is not established through referral. Yes No

(where applicable) Client relationship is established through referral by a member firm in a jurisdiction that is: ________________________________.

Higher risk/not in a

low risk country

Low6

The member firm does not have equivalent AML/CFT measures that are able to mitigate the risks of being from a higher risk country.

Yes No

*CDD documents must be obtained from the member firm

“Yes” to any of the questions in Sections 1, 2 and 3 serves as an indicator of higher risk. Where there is

one or more “yes” responses, professional judgment, with reference to the policies and procedures of the

professional firm, must be exercised as to the nature of the Customer Due Diligence to be carried out.

Please discuss any risk factor with the Money Laundering Reporting Officer (MLRO).

The following is only where the client is, or is associated with, a PEP.

PEP risk factors:

Expected receipt of large sums from governmental bodies or state-owned entities

Source of wealth described as commission earned on government contracts

Request to associate any form of secrecy with a transaction

Use of accounts at a government-owned bank or government account as source of funds

None of the above

Other (please specify):

EP 200 IG 2

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Section 4: Risk Evaluation Initial CDD procedures should be conducted as follows: - “Low” risk rating: Simplified CDD should be performed. - “Normal” risk rating: Normal CDD should be performed. - “High” or “Medium” risk rating: Enhanced CDD should be performed.

The following risk evaluation is to assist in determining what level of ongoing monitoring and CDD should be conducted. Instructions 1. Obtain an initial risk rating, being the highest risk indicator in Section 1. 2. Provide justifications in Section 2 to adjust the initial risk rating in Section 1, if considered justifiable,

subject to the following conditions:

High risk rating should NOT be reduced if Client is attached to any of the following risk factors: Section 1 : PEP, Section 2 : High-Risk Jurisdictions

Justifications must also be provided for adjustment from High-Risk to Low-Risk in Section 3

Section 1 : Current risk rating of existing client; OR Initial risk rating for new client or existing client with no previous risk rating

High

Normal

Low

Section 2 : Justifications

Section 3 : Justifications

Section 4 : Final Risk Rating

High Normal Low

Section 4 is to be signed off by the Money Laundering Reporting Officer (MLRO) if it differs from Section 1. The final risk rating may be used as a guide to the level of ongoing monitoring that the client should be subject to. This only serves as a guide and professional judgment should still be exercised in deciding on the appropriate level of ongoing monitoring and CDD processes.

EP 200 IG 2

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Section 5: Recommendation

Additional approvals may be needed for higher-risk factors.

Business relationship

Establish

Maintain

Decline

Terminate

“Terminate” action should be discussed with the MLRO to decide appropriate further action. Assessed by: Signature: _____________________________ Date: _____________________________ Name: _______________________________ Position: ____________________________ Approved by: Signature: _____________________________ Date: _____________________________ Name: _______________________________ Position: ____________________________

EP 200 IG 2

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○ Approval Form for High-Risk Engagements

In the event of high-risk engagements, senior management approval shall be obtained before establishing

(or continuing, for existing clients) the business relationship. Subsequent to senior management

approval, enhanced CDD shall be conducted.

Engagement Information

Description of engagement:

Engagement team members:

Client Information

Client name:

Registration number:

Country of incorporation:

Date of incorporation:

Address:

Contact number:

Senior Management Approval

I approve the above engagement. The team may proceed with the engagement provided that enhanced

CDD is successfully conducted.

Signature: _____________________________ Date: _____________________________ Name: _______________________________ Position: ____________________________

EP 200 IG 2

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Enhanced Customer Due Diligence

Additional information required for Enhanced CDD

Source(s) of wealth: Approximate Amount (SGD)

Select where appropriate Net Worth Annual Income

Operating income

From shareholders

From group companies

Investment

Credit facilities

Others (please specify):

Source of funds:

Background and purpose of any transaction(s) that the firm has been engaged to carry out:

Any other additional information:

MAIN FORM

(For higher-risk

clients only)

EP 200 IG 2

24

Annex 1 Unless the professional firm has doubts about the veracity of the CDD information obtained or suspects that the client, business relations with, or transaction for the client may be connected with money laundering or terrorist financing activities, it is not necessary for the professional firm to identify and verify the identity of any shareholder or beneficial owner of a client if the client is:.

(a) A Singapore Government entity

10;

(b) A foreign government entity

11;

(c) An entity listed on the Singapore Exchange;

(d) An entity listed on a stock exchange outside of Singapore that is subject to regulatory disclosure

requirements (e.g., the foreign stock exchanges of FATF member countries);

(e) A majority-owned subsidiary of a company in (c) or (d);

(f) A financial institution that is licensed, approved, registered (including a fund management company registered under paragraph 5(1)(i) of the Second Schedule to the Securities and Futures (Licensing and Conduct of Business) Regulations (Rg. 10)) or regulated by the MAS but does not include:

(i) Holders of stored value facilities, as defined in section 2(1) of the Payment Systems

(Oversight) Act (Cap. 222A); and

(ii) A person (other than a person referred to in (g) and (h)) who is exempted from licensing, approval or regulation by the MAS under any Act administered by the MAS, including a private trust company exempted from licensing under section 15 of the Trust Companies Act (Cap. 336) read with regulation 4 of the Trust Companies (Exemption) Regulations (Rg. 1);

(g) A person exempted under section 23(1)(f) of the Financial Advisers Act (Cap. 110) read with regulation 27(1)(d) of the Financial Advisers Regulation (Rg. 2);

(h) A person exempted under section 99(1)(h) of the Securities and Futures Act (Cap. 289) read with paragraph 7(1)(b) of the Second Schedule to the Securities and Futures (Licensing and Conduct of Business) Regulations;

(i) A financial institution incorporated or established outside Singapore that is subject to and

supervised for compliance with AML/CFT requirements consistent with standards set by the FATF; or

(j) An investment vehicle where the managers are financial institutions:

(i) Set out in (f)-(h) above; or

(ii) incorporated or established outside Singapore but are subject to and supervised for compliance with AML/CFT requirements consistent with standards set by the FATF,

10

Singapore Government entities include the Singapore Government, the Ministries, statutory boards, organs of state and other organisations as set out in the Singapore Government Directory. 11

A foreign government entity means a government of a foreign country or jurisdiction, a ministry within such a government, or an

agency specially established by such a government through written law.

http://www.sgdi.gov.sg/

EP 200 IG 2

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Annex 2

The following services must comply with Section 4 of the Ethics Pronouncement 200:

Buying and selling of real estate;

Managing of client money, securities or other assets;

Management of bank, savings or securities accounts;

Organisation of contributions for the creation, operation or management of companies;

Creation, operation or management of legal persons or arrangements, and buying and selling of business entities.

Corporate service providers are required to comply with Part II of the First Schedule of the Accounting and Corporate Regulatory Authority (Filing Agents and Qualified Individuals) Regulations 2015, entitled “Anti-Money Laundering and Anti-Terrorism Financing Measures”. Entities providing these services fall under corporate service providers:

Formation of corporations or other legal persons;

Providing a registered office, business address or correspondence or administrative address or other related services;

Acting, or arranging for another person to act as a partner of a partnership;

Acting, or arranging for another person to act in a position similar to the above in relation to other legal persons;

Acting, or arranging for another person to act as director or secretary of a corporation;

Acting, or arranging for another person to act, as a shareholder on behalf of any corporation other than one whose securities are listed on a securities exchange under section 2(1) or recognized securities exchange under section 283(1) of the Securities and Futures Act.