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The reporting entity must have a good understanding of the purpose and intended nature of the customer relationship. This includes, among other things, an understanding of the origin of funds included in the relationship. ECIT KYC has functions for collecting and documenting such information, which helps to uncover money laundering and terrorist financing.
The reporting entity must identify the customer, beneficial owners, and the natural persons acting on behalf of the customer. The process is often referred to as Know Your Customer KYC and may include the use of digital ID or other documents.
It is important to know who owns and controls the customer. This includes an understanding of beneficial owners, and ECIT KYC has features that provide an overview of the ownership and control structure.
Reporting entities need to collect company information about their customers to understand their structure and business. ECIT KYC offers automatic collection of relevant information, which contributes to effective anti-money laundering measures.
If money laundering is suspected, or if the customer is considered high-risk, the reporting entity must carry out enhanced customer due diligence. This may include obtaining additional information and documentation.
If the customer is a Politically Exposed Person (PEP), enhanced measures are required, including gathering information from additional sources and ongoing monitoring to detect suspicious transactions.
All information obtained through the use of ECIT KYC and customer measures must be assessed and documented. This ensures that the information about the customer is verifiable and helps to uncover money laundering and terrorist financing.
The business must keep records of the customer's identification and risk assessment for at least five years. This ensures compliance with the requirements of the Anti-Money Laundering and Terrorist Financing Act.
It is important to train employees in the requirements of Know Your Customer KYC and ensure that they understand the procedures. ECIT KYC and our AML specialists offer tailored training for your business in line with current regulations.
The Financial Supervisory Authority of Norway supervises reporting entities under the Money Laundering Act. If the FSA identifies breaches of the Money Laundering Act, it has several sanction options.
If supervision reveals circumstances that are in breach of the Money Laundering Act, the Financial Supervisory Authority of Norway may issue an order for the circumstances to cease. If the order is not complied with, the FSA has the right to impose a coercive fine.
The FSA also has the right to impose infringement fees. Supervisory practice shows that the fees can be of a significant size. For example, DNB has been fined NOK 400 million for violations of the Money Laundering Act. Smaller companies have also been fined significant fees in light of the company's turnover.
In addition, breaches of the Money Laundering Act can have consequences for the company's reputation, authorizations, permits and the right to conduct business activities or hold decision-making roles in reporting companies. There is also legal authority to prosecute companies and private individuals for violations of the Money Laundering Act.
Compliance with the law is an important step in the fight against money laundering and terrorist financing. By understanding and implementing all these requirements and obligations, businesses contribute to more responsible and legal business practices.
