Why is KYC Verification So Important for Offshore Bank Account?

If you have an offshore bank account, you must have been required by the bank manager to sign a lot of paper forms and answer a series of questions for KYC or KYCC. So why is it necessary to answer so many questions for opening a USD account? 

 

WHAT ARE KYC AND KYCC? 

KYC: know your customer

When offering services, banking organizations and financial institutions adopt KYC to verify the identities of the actual holders and actual beneficial owners of the accounts, in order to make sure whether their clients comply with the regulations on anti-money laundering and anti-terrorism financing. 

KYCC: know your customer’s customer

 

KYCC helps Banking organizations and financial institutions look to who the customers are doing business with, their activities and sources of funds, to make sure that they are not involved in fraud and money laundering. 

 

 

An integrated KYC system usually include: 

 

Customer Identification Program (CIP) 

The bank collects and documents a customer’s identification information, and verify the customer’s identity. 

 

Customer Due Diligence (CDD) 

The bank collects and evaluates relevant information about the customer to uncover any potential risk to the bank of doing business. 

 

Enhanced Due Diligence (EDD) 

EDD is specially designed for dealing with high-risk or high-net-worth customers and large transactions. The bank implements stricter verification procedures to lower financial crime risks. 

 

Simplified Due Diligence (SDD) 
The bank simplifies the process for low-risk customers such as small depositors. 

 

In brief, banks implement KYC and KYCC to do background checks on the customer and assess the risk. 

 

 

 

WHAT INFO IS REQUIRED?

Customer’s basic information

• Name, contacts, e-mail address, address, ID number. 
  
• Personal resume: The bank will get to know whether the customer is really doing business from the resume. 
• Purpose of opening account, sources of funds, reasons for choosing the bank: This can help the bank avoid the risk of receiving illegal money.
  
• Name of customer’s mother: some banks may require customers to provide their family’s name as the answer to an account security question. 

Company’s basic information

• Annual revenue. 
  
• Monthly amount and times of transfer. 
  
• Names and regions of three main buyers: the bank can assess the risk according to the regions.
  
• Need of exchange: the bank will set up relevant foreign currency account.
  
• Main products: it is suggested to filll in with products in relevant industries. 

 

HACOS advises you to use one account for transactions in one industry to lower the risk of account shutdown. If you are doing business in multiple industries, you’d better set up another company and open a relevant bank account.

 

Other info about the account

• Type of account (saving/checking/joint account)
• Need of withdrawal from ATM
• Currency

The more detailed you fill in, the easier and more efficient to get the account. If you have any questions about opening HK bank account, please feel free to contact HACOS! 

In order to help you reach the latest update on the global pandemic situation, HACOS has set a quick link on the menu of our WeChat page. Follow us, you can check it whenever you want! 

 

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