Know Your Customer (KYC) | Frequently Asked Questions (FAQs)

Framework

Banco Português de Fomento, S.A. (BPF), as a Financial Institution supervised by Banco de Portugal, has implemented a Know Your Customer (KYC) process to ensure compliance with the legal and regulatory obligations to which it is subject.

To facilitate understanding of this process, BPF provides a set of Frequently Asked Questions (FAQs), aimed at clarifying the key concepts related to the establishment and ongoing maintenance of the business relationship.

1. What does the KYC process consist of?
The KYC process consists of verifying the identity of clients and their respective representatives and beneficial owners, with the purpose of preventing money laundering and terrorist financing.
2. What legislation and recommendations does Banco Português de Fomento, S.A. follow in the KYC process?
The KYC process arises from the obligations to which BPF is subject under Law no. 83/2017 of 18 August and Notice of Banco de Portugal no. 1/2022, namely the duties of identification and due diligence.

Within the scope of the KYC process, BPF also aims to ensure compliance with the provisions of Law no. 89/2017, which establishes the Legal Framework for the Central Register of Beneficial Ownership, and Law no. 97/2017, which regulates the application and enforcement of restrictive measures adopted by the United Nations or the European Union.

BPF follows the recommendations issued on these matters by supranational bodies, such as the Financial Action Task Force (FATF/GAFI) and the European Banking Authority (EBA).
3. Why does BPF implement a KYC process?
As a Financial Institution supervised by the Banco de Portugal, BPF is considered an obliged entity under and for the purposes of Law no. 83/2017 of 18 August.

In this capacity, BPF is required to adopt identification and due diligence measures that enable it to know its customers. Article 24 of the Law sets out a range of identification elements which BPF, as an obliged entity, is legally required to collect.
4. What are supplementary diligence procedures?
In addition to the identification procedures mentioned above, BPF is also required to:

a) Obtain information on the purpose and intended nature of the business relationship;

b) Obtain information on the origin and destination of funds involved in a business relationship or in the execution of an occasional transaction;

c) Maintain ongoing monitoring of the business relationship.
5. What is the concept of "beneficial owner"?
The following persons are considered the beneficial owners of corporate entities:
  • The natural person or persons who ultimately own or control, directly or indirectly, a sufficient percentage of the shares, voting rights, or participation in the capital of the entity;
  • The natural person or persons who exercise control over the entity by other means;
  • The natural person or persons holding senior management positions, if, after all possible means have been exhausted and provided there are no grounds for suspicion:
    • No person has been identified under the preceding points; or
    • There remain doubts as to whether the person or persons identified are the beneficial owners.
For the purpose of determining beneficial ownership when the client is a corporate entity:
  • Direct ownership is indicated by a natural person holding participations representing more than 25% of the share capital, participation units, or securitised units of the client;
  • Indirect ownership is indicated by holdings representing more than 25% of the share capital, participation units, or securitised units of the client by:
    • A corporate entity controlled by one or more natural persons; or
    • Several corporate entities controlled by the same natural person or persons.
BPF collects the identification elements set out in paragraph 1 of Article 24 of the law in relation to the beneficial owners of its clients.
6. What does the application of enhanced measures entail?
In certain cases, BPF, in accordance with Law no. 83/2017, is obliged, in addition to the standard identification and due diligence procedures, to reinforce the measures adopted under the duty of identification and due diligence, namely in the following situations:
  • Whenever it establishes business relationships, carries out occasional transactions, executes operations, or otherwise engages with high-risk third countries;
  • In cases where the establishment of the business relationship or the execution of the occasional transaction occurs without the client or their representative being physically present;
  • Within the scope of business relationships or occasional transactions with clients, representatives, or beneficial owners who are politically exposed persons;
  • Whenever any other factor indicative of potentially higher risk, as provided for in Annex III of Law no. 83/2017 of 18 August, is present.
Examples of enhanced measures include:
  • Obtaining additional information on clients, their representatives, or beneficial owners, as well as on planned or executed operations;
  • Conducting additional verifications to corroborate the information obtained;
  • Involvement of higher hierarchical levels to authorise the establishment of business relationships, execution of occasional transactions, or the carrying out of operations in general;
  • Intensifying the depth or frequency of monitoring procedures for the business relationship or specific operations;
  • Reducing the time intervals for updating information and other elements collected under the identification and due diligence duty;
  • Monitoring the ongoing management of the business relationship by the compliance officer;
  • Requiring that the first payment relating to a given operation be made through a traceable means originating from a payment account opened by the client with a financial institution which, not being located in a high-risk third country, demonstrably applies equivalent identification and due diligence measures.
7. Why is there a need to apply enhanced diligence measures in these situations?
Article 36 of Law no. 83/2017 establishes the requirement to apply enhanced due diligence measures whenever a factor indicative of potentially higher risk is present.

Law no. 83/2017 of 18 August provides, in Annex III, a non-exhaustive list of factors and types indicative of potentially higher risk that justify the application of enhanced due diligence measures.
8. What are high-risk third countries?
The following are considered high-risk third countries:
  • Countries or jurisdictions identified by reliable sources, such as the FATF mutual evaluation reports, as lacking effective systems for preventing and combating money laundering and terrorist financing;
  • Countries or jurisdictions identified by credible sources as having a significant level of corruption or other criminal activities, for example through the Corruption Perceptions Index by Transparency International;
  • Countries or jurisdictions known for offering clearly more favourable preferential tax regimes, such as those listed in Ordinance no. 150/2004;
  • Countries or jurisdictions subject to sanctions, embargoes, other restrictive measures, or additional countermeasures imposed by, in particular, the United Nations and the European Union;
  • Countries or jurisdictions that provide funding or support for terrorist activities or acts, or where terrorist organizations operate, notably according to the Global Terrorism Index by Vision of Humanity.
9. Is completing the KYC form for Banco Português de Fomento, S.A. mandatory?
Yes. Completing the KYC form is mandatory to ensure compliance with the provisions of Law no. 83/2017 of 18 August. You can find the KYC form here:
10. Why does BPF request the identification of holders of shareholdings and voting rights equal to or greater than 5%?
BPF requests the identification of holders of shares and voting rights equal to or greater than 5% in order to comply with the provisions of Article 24(1)(b)(v) of Law no. 83/2017 of 18 August. This requirement also applies to holders of Participation Units representing a percentage equal to or greater than 5% of the subscribed capital of Venture Capital Funds that are clients of BPF.

All direct and indirect shareholders/holders with a stake equal to or greater than 5% in the capital and/or voting rights must be identified, specifying the percentage. In corporate structures with ownership chains, the indirect percentage should be calculated as the product of the percentages at each level.
11. Why does BPF request the identification of members of the board of directors or equivalent bodies, as well as other senior management with executive powers?
BPF requests the identification of the members of the management body or equivalent body in order to comply with the provisions of Article 24(1)(b)(vi) of Law no. 83/2017 of 18 August.
12. What types of evidence can be provided to demonstrate the origin of funds?
Clients (companies) can prove the source of funds through Financial Statements; Income Statements; Proof of Shareholder Loans; and Loan Agreements.

In the case of clients (companies) that are asset-holding vehicles (Special Purpose Vehicles), proof of the source of funds of their beneficial owners may be provided through the submission of Income Tax Returns (IRS); Payslips; Proof of Inheritance (e.g., certificate of heirs); Proof of Capital Gains; Loan Agreements; or Proof of Investment Income.

This is a non-exhaustive list, and the assessment of these documents depends on the specific circumstances of each case. The documents provided by the client should cover the total amount to be invested in the operation. In certain cases, it may be necessary to submit more than one type of document listed above. The documentation must demonstrate that the funds are owned by the entity under review.
13. What types of documents can be provided as proof of permanent residence?
The following documents may be provided as proof of permanent residence:
  • Utility bills for electricity, water, gas, or telecommunications (issued within the last 6 months);
  • Rent receipts (issued within the last 6 months);
  • Certificate from the Parish Council (issued within the last 6 months);
  • Certificate issued by the Tax Authority (issued within the last 6 months);
  • Property Tax (IMI) statement for the primary residence (issued within the last fiscal year).
14. When the permanent residence address is the same as the fiscal address, is it sufficient to provide the proof of fiscal residence to verify both situations?
Yes. Only two documents are required when the full address of the permanent residence differs from the tax domicile.
15. What is the Central Register of Ultimate Beneficial Owners (RCBE)?
The Central Register of Beneficial Ownership (RCBE) is a platform managed by the Instituto dos Registos e Notariado, where natural persons who, even indirectly or through third parties, hold the ownership or effective control of legal entities are identified. The Central Register of Beneficial Ownership was established by Law no. 89/2017 of 21 August.
16. Must the ultimate beneficial owners identified in the BPF KYC form match the information provided in the RCBE?
Yes, whenever the client, under Law no. 89/2017 of 21 August, is required to register their beneficial owners in Portugal on the Central Register of Beneficial Ownership platform.

If inaccuracies or discrepancies are identified in the RCBE, and the client does not proceed with the subsequent correction, BPF is obliged to report them to the Instituto dos Registos e Notariado.
17. What if the client is a foreign entity?
For entities incorporated in European Union countries, the equivalent proof of registration in the Central Register of Beneficial Ownership in the country of origin must be provided.

For entities incorporated in third countries, the equivalent information in the country of origin must be assessed on a case-by-case basis to verify the status of the beneficial owner.
18. Why does BPF request the submission of a dated (less than 3 months old) and signed organisational chart by management/administration?
According to internal regulations, the Bank considers an ownership structure unusual or complex if it presents the following characteristics:
  • The chain of shareholdings through the majority shareholder involves three or more legal entities or collective centres without legal personality; and/or
  • Connections with multiple jurisdictions, particularly when links with high-risk jurisdictions (e.g., offshore jurisdictions) or jurisdictions with restrictive secrecy laws are detected.
19. Is providing information under the KYC process compatible with the General Data Protection Regulation (GDPR)?
Under the legal and regulatory framework to which it is subject, BPF is obliged to identify clients, representatives, and beneficial owners who benefit from the Residence Permit for Investment Activity scheme.
20. Are all fields in the KYC form mandatory?
Yes. Under Article 58 of Law no. 83/2017 of 18 August, BPF is authorised to process the personal data necessary to ensure compliance with its legal obligations, namely data relating to identification elements, financial and banking information, and information on the origin and destination of funds.
21. What are the consequences of not filling out the required information or submitting the necessary supporting documentation?
Yes. All fields in BPF’s KYC form are mandatory, as is the submission of the supporting documentation listed at the end of the form. Failure to comply will prevent the form from being validated by a BPF employee.
22. Why does BPF request periodic renewal of the KYC process?
Handwritten signatures that match the submitted identification document or qualified digital signatures via the Digital Mobile Key (Chave Móvel Digital – CMD) are accepted. In any case, the signatures must comply with the binding formalities specified in the Commercial Registry Certificate.
23. What are the consequences of non-compliance with identification and diligence duties?
Failure to provide the legally required information will result in the business relationship not being established or being terminated, in which case BPF is obliged to exercise its duty of refusal.
24. Why does BPF periodically request the renewal of the KYC process?
Under the applicable legislation, BPF is obliged to maintain ongoing monitoring of the business relationship and ensure that the information and other elements collected in the exercise of the identification and due diligence duties are current, accurate, and complete. The frequency of updating the information referred to above is determined based on the risk profile associated with each client.
23. What happens if the client does not provide the requested information in a timely manner?
If the client does not provide the requested information in a timely manner, restrictions may be applied to the established business relationship.

In the final instance, if the client fails to provide the requested information, the Bank may terminate the business relationship under its duty of refusal.

The speed of completion of the KYC process will depend on the completeness of the information submitted.
26. What are the consequences in the event of non-compliance with the duty of identification and due diligence?
In the event of non-compliance with its legal obligations, BPF may face fines, restrictions on its commercial activities, and reputational damage, which is why the KYC process is of great importance to the Bank.