Financial Crimes Investigation Board (MASAK) made a new regulation change in the first days of April 2023. With the amendment, legal entities registered in the commercial registry have been added to the scope of remote identification applications, which were previously only available to real persons. So, how will this new regulation affect the remote customer acquisition processes in banks and financial institutions? Let's take a closer look at the details of the arrangement!
Before discussing the MASAK regulation, let's take a look at the meanings of the concepts of real person and legal person, which are of critical importance in the regulation. Natural person in the field of law; “individual” who is involved in life from birth to death is defined as “person”. Legal person is used to express foundations, institutions, companies. In other words, legal persons are actually real persons. The structures and unions formed by real persons for enterprises and different purposes are called “legal persons”.
In the first regulation published by the BRSA in 2020, procedures covering real persons and enabling banks to become customers legally were determined. It has become possible to become a bank customer, open an account or transfer money as a result of identity document and face verification processes with technology sufficient to the legislation. This first legislation and the regulations that followed were completely focused on real people. In other words, it was more prominent in individual processes in remote identification. For example, opening corporate accounts with remote customer acquisition tools was out of the question.
Clause A of Article 6 of the "Regulation on Measures Regarding the Prevention of Laundering Proceeds of Crime and Financing of Terrorism", previously published by MASAK, determined the features and procedures of remote identification applications that can be applied to real persons. With the 05.04.2023 regulation, the phrase "legal entity" was added to the title of the article. With this addition, the way for legal remote identification of legal entities has also been opened. This added statement expanded the scope of remote identification processes. The transfer of identity verification processes, which could only be performed at the individual level, to the corporate level, has brought the opportunity to perform remote transactions for corporate accounts and transfers in banks and financial institutions.
ID card information, face matching and vitality checks are used as security elements in KYC, that is, individual identification processes. In KYB processes, in addition to these security elements, it is necessary to control the information of the legal person. The KYB includes elements such as the title of the legal person, trade registry number, tax identification number. After the identity of the legal person is verified, the individual identity of the authorized person at the institutional level is verified and his legal relationship with the institution is determined. In short, KYB and KYC are processes that cannot be separated from each other.
With the latest regulation made by MASAK, the way for remote customer acquisition processes of legal entities has been opened. Institutions and organizations with technological competence can enter the process by remote identification and verification. However, it is expected that a few more regulations are required for customer acquisition to be legal. Within the scope of MASAK legislation Communiqué: 19, the phrase “legal entity” should be added to the definition of customer. In addition, it is possible to make a detailed change in the BRSA legislation regarding the PUK. With the expectation that all these changes will be realized in a short time, banks and financial institutions have already rolled up their sleeves to add KYB solutions to the processes!
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