8.1. Reliance on customer due diligence information received from third parties

The outsourced entity applies the CDD measures on behalf of the delegating financial institution

The outsourced entity is subject to the delegating financial institution’s control

It does not apply to outsourcing/agency relationships (R. 17, IN)

Financial institution may be permitted to rely on

The third party (a financial institution or a DNFBP)

If the following criteria have to be met (R. 17)

It has to be regulated, supervised or monitored

The perform the first three elements of the CDD measures (R. 10)

It has to be subject to CDD and record-keeping requirements

(a) Customer identity information

The ultimate responsibility for CDD measures remains on the financial institution relying on third parties

(b) Beneficial owner identity information

(c) The purpose and nature of the business relationship

(a) The following CDD information should immediately be obtained from the third party

(b) Other relevant CDD documentation has to be made available from the third party upon request without delay

(c) The financial institution should check if the third party complies with the AML/CFT requirements

(d) The level of country risk where the third party operates should be considered

8.2. Potentially higher-risk situations for enhanced customer due diligence measures

Higher risk factors

Customer

Financial institution

(a) Customer

E.g. significant unexplained geographic distance between

Unusual circumstances of business relationship

Unusual or complex ownership structure

Does not correspond to the nature of the company’s business

Cash-intensive business

Companies that have

Nominee shareholders

Personal asset-holding vehicles

Shares in bearers form

Non-resident customers

(b) Country or geographic

It is mandatory to apply enhanced cdd measures when the fatf calls for it, r. 19

Countries subject to sanctions, e.g. imposed by the UN

A country was identified by credible sources as

Not having adequate AML/CFT systems

Providing funds (or support) for terrorist activities

It was identified by a mutual evaluation, assessment or published in a follow up report

Has designated terrorist organizations operating within the territory

Having significant levels of criminal activity, e.g. corruption

(c) Product, service, transaction, delivery channel

Non-face-to-face business relationships or transactions

Private banking

Anonymous transactions

Payment received from unknown or un-associated third parties

Which may include cash