Country _ Name
KYC requirements
The know your customer or know your client (KYC) guidelines and regulations for financial services require that professionals try to verify the identity, suitability, and risks involved with maintaining a business relationship.

Legal affairs

National regulatory framework regarding AML and effective date of the regulations

The rules regulating AML and KYC are set out in the AML Law which was first introduced in 2001.

National regulator or relevant authority for AML controls

Application of the AML Law is divided between the following entities, depending on the type of entity subject to supervision: AML Directorate, NBS, SEC, tax authority, the entity responsible for supervision in the field of games of chance, the Ministry of Commerce, Serbian Bar Association, ministry in charge of postal traffic affairs, and Notary Chamber.

In case the aforementioned entities discover certain irregularities or determine or reveal facts that are or could be related to money laundering or terrorist financing in the course of the supervision, they are obligated to inform the AML Directorate about the measures taken in the performed supervision, about the established irregularities and illegalities, as well as about other significant facts related to the supervision.

Customer Due Diligence

Conduct of a typical KYC identification process

As a rule, identification of the client who is a natural person or representative of the client is done on the basis of insight into the personal document of the person who is also physically present. If it is not possible to obtain all the required data from that document, the missing data can be obtained from another official document or directly from the party. When the client is not physically present, the obligor must apply intensified actions and measures of knowing and monitoring the party and classify it in the high-risk category. Additional measures may include phone call with such person, communication via email, Skype, Viber and other manners of obtaining additional identification document for such person.

As an exception, the obligor may determine and verify the identity of the client on the basis of a qualified electronic certificate issued by a certification body based in the Republic of Serbia or foreign certificate that is equal to domestic.

Performing video identification without physical presence of the client is allowed in case of entities supervised by the NBS (e.g., banks, insurance companies), as well as factoring companies and accounting companies.

Possibility to meet customer due diligence requirements by relying on third parties who are obliged by law themselves to comply with AML regulations

Yes. Under the AML Law, the obligor may outsource KYC activities when establishing the business relationship with the client to other obligors of the AML Law (e.g., banks, payment institutions, etc.) as well as to foreign entities engaged in the same business. However, based on the bylaws adopted by the regulators it seems that at the moment video-identification services may only by outsourced by the entities supervised by the NBS, factoring and accounting companies to the limited scope of licensed domestic entities (e.g., banks, payment institutions, factoring companies). These activities may only be outsourced on the basis of the outsourcing agreement, following notification to the competent regulator.

Possibility to outsource customer due diligence by contract to other third parties who are not obliged by law to meet AML regulations and rely on these (e.g., WebID, IDnow, PostIdent)

No, it is not possible. In addition, the obligor may not entrust the performance of certain KYC actions to a third party, if the party is an offshore legal entity or an anonymous company, or third party from
a country that has strategic shortcomings in the system of prevention of money laundering and terrorist financing, offshore legal entity, or a quasi-bank.

Presence of a license or registration requirement for the third party in case of outsourcing customer due diligence

No special license is required for such a third party. However, the scope of entities to which KYC may be outsourced comprise only licensed entities (e.g., banks, payment institutions, factoring companies).

Further questions

Entities that could be relied on specifically by law as a third party to comply with AML regulations (regardless of outsourcing)

Yes credit institutions
Yes financial institutions
Yes auditors, external accountants, and tax advisors
Yes notaries and other independent legal professionals
No other trust or company service providers
No estate agents
No other persons trading high-value goods
No providers of gambling services
Yes Insurance representatives
Yes Investment fund management companies, voluntary pension funds investment companies
Yes Broker-dealer companies
Yes Electronic money institutions
Yes Factoring companies
Yes Public post operator
Yes Licensed entities from the third country which comply with AML requirements



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