You have not updated your due diligence questionnaire. All customers are required to regularly provide the Bank with the information requested in the due diligence process. Failure to respond in the next few weeks will regretfully result in termination of access to your accounts.
This is the opening paragraph of an email from us here at Landsbankinn. We spent quite some time couching this in polite and humble terms but the fact is that we are required as a final resort to refuse service to customers who fail to complete or update due diligence. It’s hard to make that sound friendly. We quite understand that an email like this may come as a shock and may read as a threat. Our aim is to simplify life for customers and to share information in an accessible manner. And we always aim to improve! So…
“Due diligence” (“áreiðanleikakönnun” in Icelandic) is a rather opaque word. The process is also known as “know your customer” - KYC. The purpose of the questions that are posed as part of due diligence is to ascertain whether a customer, be it a private person or legal entity, may belong to high-risk groups or if there are indications that they are attempting to enter into a business relationship with the Bank for criminal purposes. We also ask about the origin of the funds to be used in business with the Bank in order to ensure that they are not illicit assets. While the aim is certainly to do our due diligence on customers, the process might be more accessible if it were called “information gathering”, “security check” or “do-your-homework-on-new-customers”.
Landsbankinn and other banks are legally obligated to gather and store this information. We neither wish to nor are we allowed to enter into business relationships with persons who are likely to misuse the Bank for criminal purposes. Regulators, both financial supervisory authorities and tax authorities, maintain effective and regular surveillance of our compliance with rules on measures against money laundering. Which is as it should be!
All new customers need to answer the following questions. Basic due diligence is comprised of 7 questions and some additional questions are asked of individuals who hold multiple citizenships, have a US connection or are connected to high-ranking officials or politicians in some way. The questions about multiple citizenship and a US connection are asked for taxation purposes, at the demand of tax authorities. The question about a connection with high-ranking politicians, judges or international organisations aims to establish political exposure that may put you at risk of bribery or corruption.
Summing up:
- The aim of gathering information about customers is to minimise exposure to criminal activity.
- Due diligence is a questionnaire that new customers are required to complete and existing customers are asked to update regularly.
- Everyone is required to complete due diligence.
- Landsbankinn is legally obligated to ask these questions and to refuse service to customers who fail to respond.
- For the majority of customers, due diligence is comprised of just 7 questions, and it takes on average 2 minutes to respond.
To complete due diligence as a Landsbankinn customer, go to “Settings” in your app or online banking. We are happy to help on landsbankinn.is or over phone to the Customer Service Centre, tel. +354 410 4000. You’re always welcome to visit one of our branches - we look forward to seeing you!
