2018-01-01
Chapter Three.
Due diligence obligations
Article 7.
Verification of the identity of the customer and of the beneficial owner
1. In application of Letters a and b, Paragraph 1, Article 9 of the Law, reporting entities should take reasonable measures to verify the identity of customers and of their beneficial owners on the basis of documents, data or information obtained from reliable independent sources such as those specified in the following paragraphs of this article.
2. In the case of customers who are natural persons and beneficial owners, reporting entities should verify their identity by means, at least, of the display and copying of the official identity document bearing a photograph. Reporting entities may accept a copy of the identity document authenticated by a notary with the respective apostille, as appropriate.
When any person states that he acts on behalf of the customer, such circumstance should be verified by obtaining a copy of the respective power of attorney.
3. In the case of customers who are legal entities, trusts and other entities, reporting entities should identify the customer and the beneficial owner and verify their identity by means of the following documents, data or information:
a) Name or trade name, legal form, and proof of their existence. The verification may be made by means, among other documents, of a incorporation deed, the last annual report and annual accounts approved and deposited in a public register, a certificate of effectiveness issued by the respective register of companies, the instrument of constitution or some other documentation from a source equivalent to the aforementioned, which substantiates the name or trade name, legal form, and current existence of the customer.
b) Documents that substantiate the powers of representation of the person who acts on behalf of the legal entity, trust or entity. Reporting entities should also identify and verify the identity of such natural person.
c) Documents that regulate the internal regime of legal entities, trusts and other entities, such as the deed of incorporation or the articles of association of an enterprise, and the names of the persons who hold directive positions in the legal entity, trust or other entity.
d) The address of its registered office and, if it is different, the address of its main establishment or operation. The address should be verified through an information agency or by other means.
4. Financial reporting entities who maintain comprehensive or omnibus accounts of which the title is held by entities which are duly authorized to manage and to safeguard financial instruments or cash of their customers do not need to apply the measures of identification and verification which are required under Letters and a and b, Paragraph 1, Article 9 of the Law to the customers of the entity which is the title holder of the account in the case in which they operate through the comprehensive or omnibus account as long as:
- the entity holding the title to the account is an entity authorized to operate in the Principality of Andorra and the title to the account cannot lead to confusion, under any circumstances, with respect to the fact that the beneficial owners of the account are the customers of the entity holding the title to the account, or
- the entity holding the title to the account is an entity that is duly authorized to manage and to safeguard financial instruments or cash of its customers in a jurisdiction that is subject to standards on financial regulation and supervision and on matters of laundering of money or assets and terrorist financing equivalent to those in force in Andorra; and the title to the account cannot lead to confusion, under any circumstances, with respect to the fact that the beneficial owners of the account are the customers of the entity holding the title to the account.
It is considered that a jurisdiction is subject to standards on financial regulation and supervision and on matters of laundering of money or assets and terrorist financing equivalent to those in force in Andorra if, according to reliable independent sources such as, for example, reports of international bodies, it has an effective framework of financial regulation and supervision.
In this case, the reporting entity should collect sufficient information to understand and to determine reasonably the degree of equivalence of the regulatory and supervisory framework and of the framework in matters of the laundering of money or assets and terrorist financing, especially in relation to the quality of its supervision and of the measures for protection of the assets of its customers.
In either case, financial reporting entities which maintain comprehensive or omnibus accounts should:
a) Obtain information relating to the territorial scope of the beneficial owners of the account, and to activities and products linked to the omnibus account.
b) Collect sufficient information to understand the nature of the activity and to determine the risk profile of the entity, as well as to determine reasonably, on the basis of information in the public domain, whether it has been subject to an investigation or to any other administrative or judicial action relating to the prevention of the laundering of money or assets or terrorist financing.
c) Evaluate that the policies, procedures and internal controls of the entity holding the title to the account are suitable and effective for maintaining all the records and accounts which are necessary to allow the assets of each customer and the entity's own assets to be distinguished at any time and without delay.
d) Evaluate that the policies, procedures and internal controls which the entity which holds the title to the account possesses for the prevention of the laundering of money or assets and terrorist financing are suitable and effective.
e) Ensure that the entity which is the holder of the title to the account is in a position to identify and verify the identity of the beneficial owners of the assets deposited in the account.
f) Determine the level of risk which is entailed by the comprehensive or omnibus account, according to the information obtained and analysed, in matters of laundering of money or assets and terrorist financing.
g) Establish a procedure by means of which the entity which is the holder of the title to the account should immediately inform the financial reporting entity with respect to any intention to significantly change the use of the comprehensive or omnibus account. The financial reporting entity reserves the right to refuse the use of the account in support of any new commercial activity.
h) Obtain the authorization of the top management before opening the account and inform, at least every three months, its Board of Directors with respect to all the existing omnibus accounts, specifying the ones which have been newly opened during the period of reference.
i) Make periodic reviews with a focus on the risks of the entities which hold the title to these omnibus accounts in order to ensure that the requirements established above are continuously effective.
