PART 2CUSTOMER DUE DILIGENCE
Enhanced customer due diligence and ongoing monitoring14
1
A relevant person must apply on a risk-sensitive basis enhanced customer due diligence measures and enhanced ongoing monitoring—
a
in accordance with paragraphs (2) to (4);
b
in any other situation which by its nature can present a higher risk of money laundering or terrorist financing.
2
Where the customer has not been physically present for identification purposes, a relevant person must take specific and adequate measures to compensate for the higher risk, for example, by applying one or more of the following measures—
a
ensuring that the customer’s identity is established by additional documents, data or information;
b
supplementary measures to verify or certify the documents supplied, or requiring confirmatory certification by a credit or financial institution which is subject to the money laundering directive;
c
ensuring that the first payment is carried out through an account opened in the customer’s name with a credit institution.
3
A credit institution (“the correspondent”) which has or proposes to have a correspondent banking relationship with a respondent institution (“the respondent”) from a non-EEA state must—
a
gather sufficient information about the respondent to understand fully the nature of its business;
b
determine from publicly-available information the reputation of the respondent and the quality of its supervision;
c
assess the respondent’s anti-money laundering and anti-terrorist financing controls;
d
obtain approval from senior management before establishing a new correspondent banking relationship;
e
document the respective responsibilities of the respondent and correspondent; and
f
be satisfied that, in respect of those of the respondent’s customers who have direct access to accounts of the correspondent, the respondent—
i
has verified the identity of, and conducts ongoing monitoring in respect of, such customers; and
ii
is able to provide to the correspondent, upon request, the documents, data or information obtained when applying customer due diligence measures and ongoing monitoring.
4
A relevant person who proposes to have a business relationship or carry out an occasional transaction with a politically exposed person must—
a
have approval from senior management for establishing the business relationship with that person;
b
take adequate measures to establish the source of wealth and source of funds which are involved in the proposed business relationship or occasional transaction; and
c
where the business relationship is entered into, conduct enhanced ongoing monitoring of the relationship.
5
In paragraph (4), “a politically exposed person” means a person who is—
a
an individual who is or has, at any time in the preceding year, been entrusted with a prominent public function by—
i
a state other than the United Kingdom;
ii
a Community institution; or
iii
an international body,
including a person who falls in any of the categories listed in paragraph 4(1)(a) of Schedule 2;
b
an immediate family member of a person referred to in sub-paragraph (a), including a person who falls in any of the categories listed in paragraph 4(1)(c) of Schedule 2; or
c
a known close associate of a person referred to in sub-paragraph (a), including a person who falls in either of the categories listed in paragraph 4(1)(d) of Schedule 2.
6
For the purpose of deciding whether a person is a known close associate of a person referred to in paragraph (5)(a), a relevant person need only have regard to information which is in his possession or is publicly known.