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Customer Due Diligence / KYC (What is their Rationale for being a Customer…
Customer Due Diligence / KYC
What is their Rationale for being a Customer
Existing Client - What is Their Transaction History - is it in Line with Behaviour Expected
Source of Wealth
Who Client Is
Where are They Resident,
What are Their Assets,
What are Their Business Interest
Nature of Business/Occupation
Source of Funds
Company/Trust - Can the UBO be Identified
FATF -
Recommendation 10 - CDD
Recommendation 12 - PEP
Prospect Client - What is Their Anticipated Transaction Activity - Does it Fit with Customer Profile
Enhanced CDD
Higher Risk of ML/TF
Timing of Collation
During Establishment of Relationship
If Delayed a Firm must Access:-
Explanation Credible
Length Reasonable
If Delay is Grounds for ML and TF Suspicion
Simplified CDD
Low ML/TF Risk
Document Why Applied Exemption
Internal Policies & Procedures Should Advise what CDD is Required/Acceptable
Monitoring To Take Place
Start of New Relationship
When a Dormant Account Becomes Active
Change in Control/Ownership (Company)
Material Change in Level, Type or Conduct
Where a Suspicion of ML/TF Arises
Frequency of Monitoring in Line with Risk Level
PEP's
Senior Management Approval
Procedures & Policies in Place for Identifying
Enhanced Monitoring Procedure
Education & Training Policy for Relevant Employees
How to Identify, Work With and Accept PEP Accounts
Eligible Introducer
Certificate
Can Demand Copy CDD
Regular Review of Introducer
Enforcement Example
Placing Reliance on Introducer
Unit 4 - Page 97
Sanctions
OFAC List
When an Individual Appears on List they become a Specially Designated National (SND)
Not Allowed to Conduct Business with Them
A Firm Must have Policies & Procedures in Place to Screen all Transactions/Relationships
All US Citizens & Permanent Resident Aliens must Comply Wherever they are
Cuban Non US Residents Funds Should be Blocked
Unit 4 - Page 100
The USA Patriots Act 2001 and US Extraterritoriality
Sign by President Geoge W Bush on 26 October 2001 barely 7 weeks After Twin Towers
Unit 4 - Page 101
Purpose
Important to Ascertain the Risk to the Firm the Relationship will have
Whether within Firms Risk Scope
Understand clients Business Patterns, if no information can not determine if there should be a suspicion
UNIT 4 - PAGE 91