r.15 Simplified customer due diligence

(1) Subject to the provisions of section 40(1) and (2) of the Act, a reporting entity may apply simplified customer due diligence measures in relation to a particular business relationship or transaction, by taking the following into account—
(a) the risk factors, risk assessment and mitigating measures in accordance with the provisions of section 32 of the Act;
(b) relevant information produced or made available by the supervisory authority;
and
(c) result of the national risk assessment.
(2) While assessing whether there is a low degree of risk of money laundering and terrorist financing in a particular situation and the extent to which it is appropriate to apply simplified customer due diligence measures in that situation, the reporting entity shall consider specific risk factors including, among other things—
(a) customer risk factors, including whether the customer is—
(i) licensed bank which is—
(A) subject to the requirements of the domestic legislations to implement the standards set forth by the Financial Action Task Force;
(B)

supervised for compliance with the requirements under domestic legislations by a regulatory body;

(ii) a recognised foreign bank;
(iii) the Central Bank of Seychelles;
(iv) a public body in Seychelles; or
(v) legal entity, partnership or trust, the securities of which are listed on a recognised exchange which is licensed under the Securities Act (Cap.208) or in a jurisdiction that is an ordinary member of the International Organisation of Securities Commissions;
(b) product, service, transaction or delivery channel risk factors, including whether—
(i) the product or service is a life insurance policy for which the premium is low;
(ii) the product or service is an insurance policy for a pension scheme which does not provide for an early surrender option, and cannot be used as collateral;
(iii) there are reasonable grounds for believing that the product related to the relevant transaction is a pension, superannuation or similar scheme that provides retirement benefits to employees, where contributions are made by way of deduction from wages and the scheme rules do not permit the assignment of a member’s interest under the scheme;

(iv) it is a product where the risks of money laundering and terrorist financing are managed by other factors such as transparency of ownership; and
(c) geographical risk factors, including whether the country where the customer is resident, established or registered or in which it operates is—
(i) a country which has effective system to counter the money laundering and terrorist financing activities;
(ii) a country identified by credible sources as having a low level of corruption or other criminal activity such as money laundering and the production and supply of illicit drugs; and
(iii) a country which, on the basis of credible sources, such as evaluations, detailed assessment reports or published follow-up reports by the Financial Action Task Force, the International Monetary Fund, the World Bank, the Organisation for Economic Co-operation and Development or other international bodies or non-profit organisations—
(A) has requirements to counter money laundering and terrorist financing that are consistent with the revised Recommendations set forth by the Financial Action Task Force in February, 2012 and updated from time to time; and
(B) effectively implements the said Recommendations of the Financial Action Task Force.
(3) Where a reporting entity applies simplified customer due diligence, in addition to retaining sufficient information in order to demonstrate that the particular business relationship or transaction presents a low degree of risk of money laundering and terrorist financing, it shall—
(a) continue to comply with the requirements of section 35 of the Act and it may, however, adjust the extent, timing or type of measures it undertakes to reflect the lower risk identified under subregulations (1) and (2); and
(b) carry out the monitoring of any business relationships or transactions, which are subject to the measures to enable it to identify any unusual or suspicious activities or transactions.
(4) Simplified customer due diligence measures required under this regulation may include, depending on the requirements of the case, one or more of the following measures—
(a) verifying the identity of the customer and the beneficial owner after the establishment of the business relationship;
(b) reducing the frequency of customer identification updates;
(c) reducing the degree of on-going monitoring and scrutinising transactions, based on the monetary threshold; or
(d) not collecting specific information or carrying out specific measures to understand the purpose and intended nature of the business relationship but inferring the purpose and nature from the type of transactions or business relationship established.

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(5) In determining the application of simplified customer due diligence measures and the extent of those measures, reporting entities shall apply the guidelines issued by the supervisory authority in that regard from time to time.
(6) Reporting entity shall not apply simplified customer due diligence measures under subregulation (l)—
(a) if it doubts the accuracy of the documents or information previously obtained for the purposes of identification or verification;
(b) if its risk assessment changes and it no longer considers that there is a low degree of risk of money laundering and terrorist financing; or
(c) if the provisions of section 41 or section 43(1) of the Act applies to a particular business relationship or transaction.