POST Finance - KYC

The set of checks that enable the Bank to establish your identity, understand your circumstances and ensure that your transactions are consistent with them. KYC is not a sign of mistrust: it is a legal obligation that applies equally to everyone.

A regulatory framework requiring banks to detect and prevent the use of the financial system for criminal purposes. In Luxembourg, it is based primarily on the amended Act of 12 November 2004 and the CSSF regulations. This is referred to as AML/CFT in English.

The act of making money derived from illegal activities appear to be legal.

A valid official document enabling us to verify your identity: identity card, passport or residence permit. The Bank keeps a copy of this and must renew it when it expires.

• In practice: a legible, front-and-back copy of the valid document.

A recent document (generally less than three months old) proving your residential address: an energy or telecoms bill, a tax notice, or a certificate of residence issued by the local authority.

• In practice: a plain envelope or a pay-as-you-go mobile phone bill is not sufficient.

Information enabling the Bank to better understand your circumstances (occupation, income, tax residence, intended use of the account, etc.). It serves as a reference to verify that your transactions remain consistent over time.

What your account will be used for: receiving a salary, saving, wealth management, professional activity, etc. This information enables the Bank to understand the ‘normal’ functioning of your account.

The origin of the money involved in a specific transaction or of sums deposited into the account: salary, sale of an asset, inheritance, gift, dividends, etc.

•  In practical terms, if you receive or transfer a significant amount, the Bank may ask you to provide documents confirming its source.

The way in which you have built up your total wealth over the course of your life: professional career, business, inheritance, investments. This should not be confused with the source of funds, which relates to a specific transaction or amount.

Example :

• Source of funds: I receive €200,000 from the sale of a flat.
• Source of wealth: I have built up my wealth over the course of my career through my income, savings and various investments.

The country in which you are taxed. Luxembourg banks are required to collect this information and, in certain cases, pass it on to the Luxembourg tax authorities, who exchange it with other countries (OECD CRS standard) or with the United States (FATCA). You declare this via a self-certification form.

A number assigned by your country of tax residence to identify you to the tax authorities. In Luxembourg, this is the 13-digit national identification number.

A person who holds, or has held within the last year, a senior public office: Head of State, minister, member of parliament, senior judge, ambassador, director of a public enterprise, etc., as well as their family members and close associates. Being a PEP does not imply any particular suspicion but requires additional checks imposed by the regulations.

A natural person who, ultimately, owns or controls a company, a foundation or any other entity (generally, more than 25 per cent of the capital or voting rights, or control by other means). The Bank must always trace ownership back to natural persons, regardless of the complexity of the structure.

A Luxembourg register in which registered companies and entities must declare their ultimate beneficial owners. The Bank consults the RBE and compares the information with that which you provide.

For a company, association or foundation: a recent extract from the Trade and Companies Register (RCS), up-to-date articles of association, a shareholding structure chart, a list of directors and authorised signatories, and an extract from the RBE.

A person authorised to act on an account on behalf of the account holder. The authorised representative is identified and verified as a client in their own right.

Regular review of your file to check that the information is still accurate: the law requires this information to be kept up to date. This is the most common reason for KYC correspondence sent to existing customers.

• In practice: even if nothing has changed, the Bank must document this – your confirmation may be required.

Continuous monitoring of transactions to detect those that do not match the customer’s profile (unusual amounts, frequency, counterparties or countries). An alert is not an accusation: it triggers a request for an explanation or supporting documentation.

The information collected is covered by banking secrecy and the GDPR. It is used only for the purposes provided for by law and is disclosed only to authorised authorities.

The Bank must retain KYC documents for the duration of the banking relationship and, in principle, for five years after its termination, in accordance with the law.

Regulations require the Bank to hold up-to-date information on its customers. If the requested documents are not provided despite several reminders, certain restrictions may be applied to the account and, in some cases, the banking relationship may be terminated.

The information held by the Bank must remain accurate and up to date. Some documents expire or certain circumstances change over time. The Bank may therefore need to request documents that have already been provided in the past.

KYC obligations apply throughout the duration of the relationship with the Bank. Even long-standing customers may be contacted to update their details.