Q&As

Do I have to update client due diligence (CDD) documentation when it expires, eg a copy passport, for AML purposes? — 2022

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Last updated on 09/08/2022

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

  • Do I have to update client due diligence (CDD) documentation when it expires, eg a copy passport, for AML purposes?
  • Ongoing monitoring
  • How do I stay on top of this?

Do I have to update client diligence'>due diligence (CDD) documentation when it expires, eg a copy passport, for AML purposes?

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.

Ongoing monitoring

The Money Laundering Regulations 2017 (MLR 2017), as amended from 10 January 2020 by the Money Laundering and Terrorist Financing (Amendment) Regulations 2019, SI 2019/1511, require you to conduct ongoing monitoring of your business relationships.

Ongoing monitoring is made up of two limbs:

  1. scrutinising transactions throughout the course of the business relationship (including, where necessary, the source of funds) to ensure the transactions are consistent with what you know about the client, their business and risk profile, and

  2. undertaking reviews of existing records and keeping the documents or information obtained for the purpose of applying client due diligent (CDD) measures up to date (while taking into consideration your obligation to keep clients' personal data accurate and up to date under the EU General Data Protection Regulations (GDPR)—see Practice Note: AML and data protection)

Firms are subject to the GDPR. You need to consider how to balance the requirements of the MLR

Related documents:
Key definition:
Due diligence definition
What does Due diligence mean?

Due diligence means that all reasonable precautions were taken and all due diligence was exercised to avoid the commission of the offence. This requires the defendant to produce evidence of the system and procedures it has devised in an effort to avoid unfair practices.

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