Know Your Client procedure for foreign MSB companies

Foreign MSB companies (further mentioned as FMSB) are obliged to carry out the KYC procedure while performing services to their clients. These entities are required to undertake client due diligence measures that are divided into simplified and enhanced. The process of collection and evaluation of relevant information about a client or potential client must be carried out in the cases, described below:

  • FMSBs must determine the identities of individuals and entities dealt with by applying the measures indicated in the PCMLTFA and related Regulations.
  • FMSBs establish the connection with clients based on the commercial activity of the business the 2nd time they are obliged to clarify the identities of these clients or when they have an agreement with clients that are Canadian entities to conduct services of an FMSB.
  • FMSBs are obliged to conduct a continuous oversight when they start providing services to a customer.
  • FMSBs are obliged to develop and undertake appropriate measures to approve the validity of ultimate ownership data for clients-companies dealt with.
  • FMSBs must act in accordance with 3rd party identification conditions when they are obliged to execute recording and reporting conditions.
  • FMSBs are obliged to undertake appropriate measures to determine PEPs and HIOs for their activities or payment operations. If an FMSB identifies that an individual dealt with is one of PEPs or HIOs then they have particular requirements to be compliant with.

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