Q&As

I am advising a bank which is opening an account for an established UK financial leasing company which it hasn’t dealt with before. The new customer has refused to respond to standard CDD checks, saying it is subject to the UK anti-money laundering regime and CDD is not required. Is this correct?

read titleRead full title
Published on LexisPSL on 16/08/2017

The following Financial Services Q&A provides comprehensive and up to date legal information covering:

  • I am advising a bank which is opening an account for an established UK financial leasing company which it hasn’t dealt with before. The new customer has refused to respond to standard CDD checks, saying it is subject to the UK anti-money laundering regime and CDD is not required. Is this correct?
  • What is CDD?
  • When is CDD required?
  • What does CDD involve?
  • General CDD measures
  • EDD
  • SDD
  • Is there an exemption if the customer is subject to the UK anti-money laundering regime?
  • Further information on CDD

I am advising a bank which is opening an account for an established UK financial leasing company which it hasn’t dealt with before. The new customer has refused to respond to standard CDD checks, saying it is subject to the UK anti-money laundering regime and CDD is not required. Is this correct?

What is CDD?

Customer due diligence (CDD) is a package of measures which credit institutions (such as banks) and other financial institutions are required to apply to their customers to ensure, as far as practicable, that the financial system is used only by bona fide persons for bona fide purposes.

CDD is also known as know your customer (KYC).

In the UK, CDD requirements are set out in the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, SI 2017/692 (2017 MLRs), which implement the Fourth Money Laundering Directive (EU) 2015/849 (MLD4) and the Second Wire Transfer Regulation (EU) 2015/847 (WTR2) and entered into force on 26 June 2017. The 2017 MLRs replaced the Money Laundering Regulations 2007, SI 2007/2157 (2007 MLRs), which implemented the Third Money Laundering Directive 2005/60/EC (MLD3) in the UK.

When is CDD required?

2017 MLRs, SI 2017/692, reg 27 requires credit institutions and financial institutions to carry out CCD if they:

  1. establish a business relationship

  2. carry out an occasional transaction which amounts to €15,000 or more, whether that

Related documents:

Popular documents