Money laundering and terrorist financing measures
Why are you required to provide information, personal data and documentation at the onset of your business relationship with the Bank?
According to Act no. 140/2018 on measures against money laundering and terrorist financing, Íslandsbanki must carry out due diligence on all its customers and their activities and transactions in such a manner as to be aware of any activities used for money laundering or terrorist financing.
Íslandsbanki shall under this Act apply customer due diligence measures when establishing a permanent business relationship i.e. before they open an account or take a loan. Due diligence is also required when carrying out an occasional transaction amounting to EUR 15,000 or more and when transferring funds, in the case of an occasional transaction, whether the transfer is domestic or across borders, amounting to EUR 1,000 or more.
Íslandsbanki carries out Due diligence by requesting information on the new customer and their business. The customer must answer a questionnaire and submit the necessary documents. The information required includes personal information on the customer, the origin of the money and the reason for business. The Bank shall require that natural persons prove their identity by producing approved identification documents (personal ID, driving licence, passport, or electronic ID) and must provide a copy to the bank.
Legal entities, trusts or similar arrangements prove their identities by submitting a certificate from the Company Register of the Directorate of Internal Revenue, or a comparable public register, with their name, address and official registration number, or comparable information; holders of power of procuration and others who hold special authorisation to represent a customer vis-à-vis a financial undertaking, including managing directors and members of the board of directors, shall prove their identities. Persons who act on behalf of a trust or similar arrangement, i.e. trustees, provide the obliged entity with information about the beneficial owner(s); they shall also, at their own initiative, inform the obliged entity of their standing as trustees: Persons acting on behalf of third parties demonstrate that their power of procuration or special authorisation has been duly obtained and prove their identities. There shall be sufficient information about the beneficial owner and that he has proven his / her identity.
It is illegal to conduct business with any individual or legal entity that has not fulfilled the legal requirements of due diligence.
Due diligence is carried out at the onset of the business relationship and repeated in the case of contractual changes or changes to ownership. The Bank must conduct due diligence on a regular basis to ensure the validity of the information submitted. Customers can expect to be repeatedly asked the same questions and required to submit the necessary documents. This is not just a legal requirement but also acts as a security measure for the customer to ensure that only those with authorisation can act on behalf of the business in question. In doing so, the Bank is fulfilling legal requirements and increasing the security of its customers.
The legal requirements described here, to prevent money laundering and terrorist financing, reflect the extensive requirements that apply to all financial entities at the international level. The objective of these measures is to prevent money laundering used to support criminal activity, drug traffic and terrorism. The Bank must contact the police immediately if they suspect any such activity.
Beneficial owner(s): One or more natural persons who ultimately own or control the customer, legal entity or natural person on whose behalf a transaction or activity is being conducted or carried out. Beneficial owner is considered to be: a. In the case of a legal person:
1. the natural person or persons who in fact own or control the legal person through the direct or indirect ownership of a share of more than 25% in the legal person, control more than 25% of the voting rights or are regarded as having control of the legal person in another manner; however, this provision does not apply to legal persons that are listed on a regulated market as defined in the Stock Exchange Act.