Do I have to make a suspicious activity report where I have been unable to apply CDD measures?

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Published on LexisPSL on 26/03/2020

The following Practice Compliance Q&A provides comprehensive and up to date legal information covering:

  • Do I have to make a suspicious activity report where I have been unable to apply CDD measures?
  • Client due diligence
  • Requirement to cease acting
  • Reporting suspicions
  • Time to make a report?

STOP PRESS: Draft Legal Sector Affinity Group (LSAG) AML guidance was published on 20 January 2021. It awaits approval by HM Treasury and any content may be amended before the final version is published with the Treasury's approval. This document reflects HM Treasury approved LSAG AML guidance published in 2018 and will be updated in due course.

Client due diligence (CDD) and suspicious activity reporting are central pillars of the anti-money laundering (AML)/counter-terrorist financing regime.

Client due diligence

The component parts of CDD are:

  1. identifying the client, unless the identity of that client is already known to you and has been verified by you

  2. verifying that identity unless the client's identity has already been verified by you, and

  3. assessing, and where appropriate obtaining information on, the purpose and intended nature of the business relationship or occasional transaction

You must determine the extent of your CDD measures and ongoing monitoring on a risk-sensitive basis, depending on the type of client, business relationship and matter.

You must be able to demonstrate to your supervisory authority (eg the SRA) that the extent of your CDD measures and monitoring are appropriate in view of the risks of money laundering and terrorist financing:

  1. identified in your own risk assessment, and

  2. as identified by your supervisory authority and made available to your firm—see eg Practice Note: SRA AML and counter-terrorist financing risk assessment

Where you decide

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