• A.
  CUSTOMER DUE DILIGENCE AND TIPPING-OFF
  1. If, during the establishment or course of the customer relationship, or when conducting occasional transactions, a financial institution suspects that transactions relate to money laundering or terrorist financing Terrorist financing is the financing of terrorist acts, and of terrorists and terrorist organisations., then the institution should For the purposes of assessing compliance with the FATF Recommendations, the word should has the same meaning as must.:
     1. normally seek to identify and verify the identity*Reliable, independent source documents, data or information will hereafter be referred to as “identification data” of the customer and the beneficial ownerBeneficial owner refers to the natural person(s) who ultimately owns or controls a customer and/or the natural person on whose behalf a transaction is being conducted. It also includes those persons who exercise ultimate effective control over a legal person or arrangement., whether permanent or occasional, and irrespective of any exemption or any designated threshold that might otherwise apply; and
     2. make a suspicious transaction report (STR) to the financial intelligence unit (FIU), in accordance with Recommendation 20.
  2. Recommendation 21 prohibits financial institutions Financial institutions means any natural or legal person who conducts as abusiness one or more of the following activities or operations for or on behalf of a customer:
     1) Acceptance of deposits and other repayable funds from the public.
     2) Lending.
     3) Financial leasing.
     4) Money or value transfer services.
     5) Issuing and managing means of payment (e.g. credit and debit cards,cheques, traveller's cheques, money orders and bankers' drafts, electronic money).
     6) Financial guarantees and commitments.
     7) Trading in:
     a) money market instruments (cheques, bills, certificates of deposit, derivatives etc.);
     b) foreign exchange;
     c) exchange, interest rate and index instruments;
     d) transferable securities;
     8) Participation in securities issues and the provision of financial services related to such issues.
     9) Individual and collective portfolio management.
     11) Otherwise investing, administering or managing funds or money on behalf of other persons.
     12) Underwriting and placement of life insurance and other investment related insurance.
     13) Money and currency changing.
     , their directors, officers and employees from disclosing the fact that an STR or related information is being reported to the FIU. A risk All references to risk refer to the risk of money laundering and/or terrorist financing. This term should be read in conjunction with the Interpretive Note to Recommendation 1. exists that customers could be unintentionally tipped off when the financial institution is seeking to perform its customer due diligence (CDD) obligations in these circumstances. The customer’s awareness of a possible STR or investigation could compromise future efforts to investigate the suspected money laundering or terrorist financing operation.
  3. Therefore, if financial institutions form a suspicion that transactions relate to money laundering or terrorist financing, they should take into account the risk of tipping-off when performing the CDD process. If the institution reasonably believes that performing the CDD process will tip-off the customer or potential customer, it may choose not to pursue that process, and should file an STR. Institutions should ensure that their employees are aware of, and sensitive to, these issues when conducting CDD.
• B.
  CDD – PERSONS ACTING ON BEHALF OF A CUSTOMER
  4. When performing elements (a) and (b) of the CDD measures specified under Recommendation 10, financial institutions Financial institutions means any natural or legal person who conducts as abusiness one or more of the following activities or operations for or on behalf of a customer:
     1) Acceptance of deposits and other repayable funds from the public.
     2) Lending.
     3) Financial leasing.
     4) Money or value transfer services.
     5) Issuing and managing means of payment (e.g. credit and debit cards,cheques, traveller's cheques, money orders and bankers' drafts, electronic money).
     6) Financial guarantees and commitments.
     7) Trading in:
     a) money market instruments (cheques, bills, certificates of deposit, derivatives etc.);
     b) foreign exchange;
     c) exchange, interest rate and index instruments;
     d) transferable securities;
     8) Participation in securities issues and the provision of financial services related to such issues.
     9) Individual and collective portfolio management.
     11) Otherwise investing, administering or managing funds or money on behalf of other persons.
     12) Underwriting and placement of life insurance and other investment related insurance.
     13) Money and currency changing.
     should also be required to verify that any person purporting to act on behalf of the customer is so authorised, and should For the purposes of assessing compliance with the FATF Recommendations, the word should has the same meaning as must. identify and verify the identity of that person.
• C.
  CDD FOR LEGAL PERSONS AND ARRANGEMENTS
  5. When performing CDD measures in relation to customers that are legal persons Legal persons refers to any entities other than natural persons that can establish a permanent customer relationship with a financial institution or otherwise own property. This can include companies, bodies corporate, foundations, anstalt, partnerships, or associations and other relevantly similar entities. or Legal arrangementsLegal arrangements refers to express trusts or other similar legal arrangements. Examples of other similar arrangements (for AML/CFT purposes) include fiducie, treuhand and fideicomiso.*In these Recommendations references to legal arrangements such as trusts (or other similar arrangements) being the customer of a financial institution or DNFBP or carrying out a transaction, refers to situations where a natural or legal person that is the trustee establishes the business relationship or carries out the transaction on the behalf of the beneficiaries or according to the terms of the trust. The normal CDD requirements for customers that are natural or legal persons would continue to apply, including paragraph 4 of INR.10, but the additional requirements regarding the trust and the beneficial owners of the trust (as defined) would also apply., financial institutions Financial institutions means any natural or legal person who conducts as abusiness one or more of the following activities or operations for or on behalf of a customer:
     1) Acceptance of deposits and other repayable funds from the public.
     2) Lending.
     3) Financial leasing.
     4) Money or value transfer services.
     5) Issuing and managing means of payment (e.g. credit and debit cards,cheques, traveller's cheques, money orders and bankers' drafts, electronic money).
     6) Financial guarantees and commitments.
     7) Trading in:
     a) money market instruments (cheques, bills, certificates of deposit, derivatives etc.);
     b) foreign exchange;
     c) exchange, interest rate and index instruments;
     d) transferable securities;
     8) Participation in securities issues and the provision of financial services related to such issues.
     9) Individual and collective portfolio management.
     11) Otherwise investing, administering or managing funds or money on behalf of other persons.
     12) Underwriting and placement of life insurance and other investment related insurance.
     13) Money and currency changing.
     should For the purposes of assessing compliance with the FATF Recommendations, the word should has the same meaning as must. be required to identify and verify the customer, and understand the nature of its business, and its ownership and control structure. The purpose of the requirements set out in (a) and (b) below, regarding the identification and verification of the customer and the beneficial owner, is twofold: first, to prevent the unlawful use of legal persons Legal persons refers to any entities other than natural persons that can establish a permanent customer relationship with a financial institution or otherwise own property. This can include companies, bodies corporate, foundations, anstalt, partnerships, or associations and other relevantly similar entities. and arrangements, by gaining a sufficient understanding of the customer to be able to properly assess the potential money laundering and terrorist financing risks All references to risk refer to the risk of money laundering and/or terrorist financing. This term should be read in conjunction with the Interpretive Note to Recommendation 1. associated with the business relationship; and, second, to take appropriate steps to mitigate the risks. As two aspects of one process, these requirements are likely to interact and complement each other naturally. In this context, financial institutions should be required to:
     1. Identify the customer and verify its identity. The type of information that would normally be needed to perform this function would be:
        1. Name, legal form and proof of existence – verification could be obtained, for example, through a certificate of incorporation, a certificate of good standing, a partnership agreement, a deed of trust, or other documentation from a reliable independent source proving the name, form and current existence of the customer.
        2. The powers that regulate and bind the legal person or arrangement (e.g. the memorandum and articles of association of a company), as well as the names of the relevant persons having a senior management position in the legal person or arrangement (e.g. senior managing directors in a company, trustee The terms trust and trustee should be understood as described in and consistent with Article 2 of the Hague Convention on the law applicable to trusts and their recognition
           Trustees may be professional (e.g. depending on the jurisdiction, a lawyer or trust company) if they are paid to act as a trustee in the course of their business, or non-professional (e.g. a person acting without reward on behalf of family). (s) of a trust).
        3. The address of the registered office, and, if different, a principal place of business.
     2. Identify the beneficial ownerBeneficial owner refers to the natural person(s) who ultimately owns or controls a customer and/or the natural person on whose behalf a transaction is being conducted. It also includes those persons who exercise ultimate effective control over a legal person or arrangement.s of the customer and take reasonable measuresThe term Reasonable Measures means: appropriate measures which are commensurate with the money laundering or terrorist financing risks.*In determining the reasonableness of the identity verification measures, regard should be had to the money laundering and terrorist financing risks posed by the customer and the business relationship. to verify the identity of such persons, through the following information:
        1. For legal persons*Measures (i.i) to (i.iii) are not alternative options, but are cascading measures, with each to be used where the previous measure has been applied and has not identified a beneficial owner.
           1. The identity of the natural persons (if any – as ownership interests can be so diversified that there are no natural persons (whether acting alone or together) exercising control of the legal person or arrangement through ownership) who ultimately have a controlling ownership interest*A controlling ownership interest depends on the ownership structure of the company. It may be based on a threshold, e.g. any person owning more than a certain percentage of the company (e.g. 25%). in a legal person; and
           2. to the extent that there is doubt under (i.i) as to whether the person(s) with the controlling ownership interest are the beneficial ownerBeneficial owner refers to the natural person(s) who ultimately owns or controls a customer and/or the natural person on whose behalf a transaction is being conducted. It also includes those persons who exercise ultimate effective control over a legal person or arrangement.(s) or where no natural person exerts control through ownership interests, the identity of the natural persons (if any) exercising control of the legal person or arrangement through other means.
           3. Where no natural person is identified under (i.i) or (i.ii) above, financial institutions should For the purposes of assessing compliance with the FATF Recommendations, the word should has the same meaning as must. identify and take reasonable measures The term Reasonable Measures means: appropriate measures which are commensurate with the money laundering or terrorist financing risks. to verify the identity of the relevant natural person who holds the position of senior managing official.
        2. For legal arrangements Legal arrangements refers to express trusts or other similar legal arrangements. Examples of other similar arrangements (for AML/CFT purposes) include fiducie, treuhand and fideicomiso.:
           1. Trusts – the identity of the settlor Settlors are natural or legal persons who transfer ownership of their assets to trustees by means of a trust deed or similar arrangement., the trustee(s), the protector (if any), the beneficiaries or class of beneficiaries*For beneficiary(ies) of trusts that are designated by characteristics or by class, financial institutions should obtain sufficient information concerning the beneficiary to satisfy the financial institution that it will be able to establish the identity of the beneficiary at the time of the payout or when the beneficiary intends to exercise vested rights., and any other natural person exercising ultimate effective control over the trust (including through a chain of control/ownership);
           2. Other types of legal arrangements – the identity of persons in equivalent or similar positions.

     Where the customer or the owner of the controlling interest is a company listed on a stock exchange and subject to disclosure requirements (either by stock exchange rules or through law or enforceable means Please refer to the Note on the Legal Basis of requirements on Financial Institutions and DNFBPs.) which impose requirements to ensure adequate transparency of beneficial ownership, or is a majority-owned subsidiary of such a company, it is not necessary to identify and verify the identity of any shareholder or beneficial owner of such companies.
     

     The relevant identification data The term identification data refers to reliable, independent source documents, data or information. may be obtained from a public register, from the customer or from other reliable sources.

• D.
  CDD FOR BENEFICIARIES OF LIFE INSURANCE POLICIES
  6. For life or other investment-related insurance business, financial institutions Financial institutions means any natural or legal person who conducts as abusiness one or more of the following activities or operations for or on behalf of a customer:
     1) Acceptance of deposits and other repayable funds from the public.
     2) Lending.
     3) Financial leasing.
     4) Money or value transfer services.
     5) Issuing and managing means of payment (e.g. credit and debit cards,cheques, traveller's cheques, money orders and bankers' drafts, electronic money).
     6) Financial guarantees and commitments.
     7) Trading in:
     a) money market instruments (cheques, bills, certificates of deposit, derivatives etc.);
     b) foreign exchange;
     c) exchange, interest rate and index instruments;
     d) transferable securities;
     8) Participation in securities issues and the provision of financial services related to such issues.
     9) Individual and collective portfolio management.
     11) Otherwise investing, administering or managing funds or money on behalf of other persons.
     12) Underwriting and placement of life insurance and other investment related insurance.
     13) Money and currency changing.
     should, in addition to the CDD measures required for the customer and the beneficial ownerBeneficial owner refers to the natural person(s) who ultimately owns or controls a customer and/or the natural person on whose behalf a transaction is being conducted. It also includes those persons who exercise ultimate effective control over a legal person or arrangement., conduct the following CDD measures on the beneficiary(ies)refers to those natural persons, or groups of natural persons who receive charitable, humanitarian or other types of assistance through the services of the NPO. of life insurance and other investment related insurance policies, as soon as the beneficiary(ies) are identified/designated:
     1. For beneficiary(ies) that are identified as specifically named natural or legal persons Legal persons refers to any entities other than natural persons that can establish a permanent customer relationship with a financial institution or otherwise own property. This can include companies, bodies corporate, foundations, anstalt, partnerships, or associations and other relevantly similar entities. or legal arrangements Legal arrangements refers to express trusts or other similar legal arrangements. Examples of other similar arrangements (for AML/CFT purposes) include fiducie, treuhand and fideicomiso. – taking the name of the person;
     2. For beneficiary(ies) that are designated by characteristics or by class (e.g. spouse or children at the time that the insured event occurs) or by other means (e.g. under a will) – obtaining sufficient information concerning the beneficiary to satisfy the financial institution that it will be able to establish the identity of the beneficiary at the time of the payout.
     The information collected under (a) and/or (b) should For the purposes of assessing compliance with the FATF Recommendations, the word should has the same meaning as must. be recorded and maintained in accordance with the provisions of Recommendation 11.
  7. For both the cases referred to in 6(a) and (b) above, the verification of the identity of the beneficiary(ies) should occur at the time of the payout.
  8. The beneficiary of a life insurance policy should be included as a relevant risk factor by the financial institution in determining whether enhanced CDD measures are applicable. If the financial institution determines that a beneficiary who is a legal person or a legal arrangement presents a higher risk All references to risk refer to the risk of money laundering and/or terrorist financing. This term should be read in conjunction with the Interpretive Note to Recommendation 1., then the enhanced CDD measures should include reasonable measures The term Reasonable Measures means: appropriate measures which are commensurate with the money laundering or terrorist financing risks. to identify and verify the identity of the beneficial owner of the beneficiary, at the time of payout.
  9. Where a financial institution is unable to comply with paragraphs 6 to 8 above, it should consider making a suspicious transaction report.
• E.
  RELIANCE ON IDENTIFICATION AND VERIFICATION ALREADY PERFORMED
  10. The CDD measures set out in Recommendation 10 do not imply that financial institutions Financial institutions means any natural or legal person who conducts as abusiness one or more of the following activities or operations for or on behalf of a customer:
      1) Acceptance of deposits and other repayable funds from the public.
      2) Lending.
      3) Financial leasing.
      4) Money or value transfer services.
      5) Issuing and managing means of payment (e.g. credit and debit cards,cheques, traveller's cheques, money orders and bankers' drafts, electronic money).
      6) Financial guarantees and commitments.
      7) Trading in:
      a) money market instruments (cheques, bills, certificates of deposit, derivatives etc.);
      b) foreign exchange;
      c) exchange, interest rate and index instruments;
      d) transferable securities;
      8) Participation in securities issues and the provision of financial services related to such issues.
      9) Individual and collective portfolio management.
      11) Otherwise investing, administering or managing funds or money on behalf of other persons.
      12) Underwriting and placement of life insurance and other investment related insurance.
      13) Money and currency changing.
      have to repeatedly identify and verify the identity of each customer every time that a customer conducts a transaction. An institution is entitled to rely on the identification and verification steps that it has already undertaken, unless it has doubts about the veracity of that information. Examples of situations that might lead an institution to have such doubts could be where there is a suspicion of money laundering in relation to that customer, or where there is a material change in the way that the customer’s account is operated, which is not consistent with the customer’s business profile
• F.
  TIMING OF VERIFICATION
  11. Examples of the types of circumstances (in addition to those referred to above for beneficiaries of life insurance policies) where it would be permissible for verification to be completed after the establishment of the business relationship, because it would be essential not to interrupt the normal conduct of business, include:
      • Non face-to-face business.
      • Securities transactions. In the securities industry, companies and intermediaries may be required to perform transactions very rapidly, according to the market conditions at the time the customer is contacting them, and the performance of the transaction may be required before verification of identity is completed.
  12. financial institutions Financial institutions means any natural or legal person who conducts as abusiness one or more of the following activities or operations for or on behalf of a customer:
      1) Acceptance of deposits and other repayable funds from the public.
      2) Lending.
      3) Financial leasing.
      4) Money or value transfer services.
      5) Issuing and managing means of payment (e.g. credit and debit cards,cheques, traveller's cheques, money orders and bankers' drafts, electronic money).
      6) Financial guarantees and commitments.
      7) Trading in:
      a) money market instruments (cheques, bills, certificates of deposit, derivatives etc.);
      b) foreign exchange;
      c) exchange, interest rate and index instruments;
      d) transferable securities;
      8) Participation in securities issues and the provision of financial services related to such issues.
      9) Individual and collective portfolio management.
      11) Otherwise investing, administering or managing funds or money on behalf of other persons.
      12) Underwriting and placement of life insurance and other investment related insurance.
      13) Money and currency changing.
      will also need to adopt risk management procedures with respect to the conditions under which a customer may utilise the business relationship prior to verification. These procedures should For the purposes of assessing compliance with the FATF Recommendations, the word should has the same meaning as must. include a set of measures, such as a limitation of the number, types and/or amount of transactions that can be performed and the monitoring of large or complex transactions being carried out outside the expected norms for that type of relationship.
• G.
  EXISTING CUSTOMERS
  13. Financial institutions should For the purposes of assessing compliance with the FATF Recommendations, the word should has the same meaning as must. be required to apply CDD measures to existing customers*Existing customers as at the date that the national requirements are brought into force. on the basis of materiality and risk, and to conduct due diligence on such existing relationships at appropriate times, taking into account whether and when CDD measures have previously been undertaken and the adequacy of data obtained.
• H.
  RISK BASED APPROACH*The RBA does not apply to the circumstances when CDD should be required but may be used to determine the extent of such measures.
  14. The examples below are not mandatory elements of the FATF Standards, and are included for guidance only. The examples are not intended to be comprehensive, and although they are considered to be helpful indicators, they may not be relevant in all circumstances.

  Higher risks

  15. There are circumstances where the risk All references to risk refer to the risk of money laundering and/or terrorist financing. This term should be read in conjunction with the Interpretive Note to Recommendation 1. of money laundering or terrorist financing is higher, and enhanced CDD measures have to be taken. When assessing the money laundering and terrorist financing Terrorist financing is the financing of terrorist acts, and of terrorists and terrorist organisations. risks relating to types of customers, countries or geographic areas, and particular products, services, transactions or delivery channels, examples of potentially higher-risk situations (in addition to those set out in Recommendations 12 to 16) include the following:
      1. Customer risk factors:
         • The business relationship is conducted in unusual circumstances (e.g. significant unexplained geographic distance between the financial institution and the customer).
         • Non-resident customers.
         • legal persons Legal persons refers to any entities other than natural persons that can establish a permanent customer relationship with a financial institution or otherwise own property. This can include companies, bodies corporate, foundations, anstalt, partnerships, or associations and other relevantly similar entities. or arrangements that are personal asset-holding vehicles.
         • Companies that have nominee shareholders or shares in bearer form.
         • Business that are cash-intensive.
         • The ownership structure of the company appears unusual or excessively complex given the nature of the company’s business.
      2. Country or geographic risk factors:*Under Recommendation 19 it is mandatory for countries to require financial institutions to apply enhanced due diligence when the FATF calls for such measures to be introduced.
         • Countries identified by credible sources, such as mutual evaluation or detailed assessment reports or published follow-up reports, as not having adequate AML/CFT systems.
         • Countries subject to sanctions, embargos or similar measures issued by, for example, the United Nations.
         • Countries identified by credible sources as having significant levels ofcorruption or other criminal activity Criminal activity refers to: (a) all criminal acts that would constitute a predicate offence for money laundering in the country; or (b) at a minimum to those offences that would constitute a predicate offence as required by Recommendation 3..
         • Countries or geographic areas identified by credible sources as providing funding or support for terrorist activities, or that have designated terrorist organisations The term terrorist organisation refers to any group of terrorists that: (i) commits, or attempts to commit, terrorist acts by any means, directly or indirectly, unlawfully and wilfully; (ii) participates as an accomplice in terrorist acts; (iii) organises or directs others to commit terrorist acts; or (iv) contributes to the commission of terrorist acts by a group of persons acting with a common purpose where the contribution is made intentionally and with the aim of furthering the terrorist act or with the knowledge of the intention of the group to commit a terrorist act. operating within their countryAll references in the FATF Recommendations to country or countries apply equally to territories or jurisdictions..
      3. Product, service, transaction or delivery channel risk factors:
         • Private banking.
         • Anonymous transactions (which may include cash).
         • Non-face-to-face business relationships or transactions.
         • Payment received from unknown or un-associated third parties For the purposes of Recommendations 6 and 7, the term third parties includes, but is not limited to, financial institutions and DNFBPs. Please also refer to the IN to Recommendation 17.

  Lower risks

  16. There are circumstances where the risk of money laundering or terrorist financing may be lower. In such circumstances, and provided there has been an adequate analysis of the risk by the countryAll references in the FATF Recommendations to country or countries apply equally to territories or jurisdictions. or by the financial institution, it could be reasonable for a country to allow its financial institutions Financial institutions means any natural or legal person who conducts as abusiness one or more of the following activities or operations for or on behalf of a customer:
      1) Acceptance of deposits and other repayable funds from the public.
      2) Lending.
      3) Financial leasing.
      4) Money or value transfer services.
      5) Issuing and managing means of payment (e.g. credit and debit cards,cheques, traveller's cheques, money orders and bankers' drafts, electronic money).
      6) Financial guarantees and commitments.
      7) Trading in:
      a) money market instruments (cheques, bills, certificates of deposit, derivatives etc.);
      b) foreign exchange;
      c) exchange, interest rate and index instruments;
      d) transferable securities;
      8) Participation in securities issues and the provision of financial services related to such issues.
      9) Individual and collective portfolio management.
      11) Otherwise investing, administering or managing funds or money on behalf of other persons.
      12) Underwriting and placement of life insurance and other investment related insurance.
      13) Money and currency changing.
      to apply simplified CDD measures.
  17. When assessing the money laundering and terrorist financing risks relating to types of customers, countries or geographic areas, and particular products, services, transactions or delivery channels, examples of potentially lower risk situations include the following:
      1. Customer risk factors:
         • Financial institutions and DNFBPs – where they are subject to requirements to combat money laundering and terrorist financing consistent with the FATF Recommendations, have effectively implemented those requirements, and are effectively supervised or monitored in accordance with the Recommendations to ensure compliance with those requirements.
         • Public companies listed on a stock exchange and subject to disclosure requirements (either by stock exchange rules or through law or enforceable means Please refer to the Note on the Legal Basis of requirements on Financial Institutions and DNFBPs.), which impose requirements to ensure adequate transparency of beneficial ownership.
         • Public administrations or enterprises.
      2. Product, service, transaction or delivery channel risk factors:
         • Life insurance policies where the premium is low (e.g. an annual premium of less than USD/EUR 1,000 or a single premium of less than USD/EUR 2,500).
         • Insurance policies for pension schemes if there is no early surrender optionand the policy cannot be used as collateral.
         • A pension, superannuation or similar scheme that provides retirement benefits to employees, where contributions are made by way of deduction from wages, and the scheme rules do not permit the assignment of a member’s interest under the scheme.
         • Financial products or services that provide appropriately defined and limited services to certain types of customers, so as to increase access for financial inclusion purposes.
      3. Country risk factors:
         • Countries identified by credible sources, such as mutual evaluation or detailed assessment reports, as having effective AML/CFT systems.
         • Countries identified by credible sources as having a low level of corruption or other criminal activity Criminal activity refers to: (a) all criminal acts that would constitute a predicate offence for money laundering in the country; or (b) at a minimum to those offences that would constitute a predicate offence as required by Recommendation 3..

      In making a risk All references to risk refer to the risk of money laundering and/or terrorist financing. This term should be read in conjunction with the Interpretive Note to Recommendation 1. assessment, countries or financial institutions Financial institutions means any natural or legal person who conducts as abusiness one or more of the following activities or operations for or on behalf of a customer:
      1) Acceptance of deposits and other repayable funds from the public.
      2) Lending.
      3) Financial leasing.
      4) Money or value transfer services.
      5) Issuing and managing means of payment (e.g. credit and debit cards,cheques, traveller's cheques, money orders and bankers' drafts, electronic money).
      6) Financial guarantees and commitments.
      7) Trading in:
      a) money market instruments (cheques, bills, certificates of deposit, derivatives etc.);
      b) foreign exchange;
      c) exchange, interest rate and index instruments;
      d) transferable securities;
      8) Participation in securities issues and the provision of financial services related to such issues.
      9) Individual and collective portfolio management.
      11) Otherwise investing, administering or managing funds or money on behalf of other persons.
      12) Underwriting and placement of life insurance and other investment related insurance.
      13) Money and currency changing.
      could, when appropriate, also take into account possible variations in money laundering and terrorist financing risk between different regions or areas within a countryAll references in the FATF Recommendations to country or countries apply equally to territories or jurisdictions..

  18. Having a lower money laundering and terrorist financing risk for identification and verification purposes does not automatically mean that the same customer is lower risk for all types of CDD measures, in particular for ongoing monitoring of transactions.

  Risk variables

  19. When assessing the money laundering and terrorist financing risks relating to types of customers, countries or geographic areas, and particular products, services, transactions or delivery channels risk, a financial institution should For the purposes of assessing compliance with the FATF Recommendations, the word should has the same meaning as must. take into account risk variables relating to those risk categories. These variables, either singly or in combination, may increase or decrease the potential risk posed, thus impacting the appropriate level of CDD measures. Examples of such variables include:
      • The purpose of an account or relationship.
      • The level of assets to be deposited by a customer or the size of transactions undertaken.
      • The regularity or duration of the business relationship.

  Enhanced CDD measures

  20. financial institutions Financial institutions means any natural or legal person who conducts as abusiness one or more of the following activities or operations for or on behalf of a customer:
      1) Acceptance of deposits and other repayable funds from the public.
      2) Lending.
      3) Financial leasing.
      4) Money or value transfer services.
      5) Issuing and managing means of payment (e.g. credit and debit cards,cheques, traveller's cheques, money orders and bankers' drafts, electronic money).
      6) Financial guarantees and commitments.
      7) Trading in:
      a) money market instruments (cheques, bills, certificates of deposit, derivatives etc.);
      b) foreign exchange;
      c) exchange, interest rate and index instruments;
      d) transferable securities;
      8) Participation in securities issues and the provision of financial services related to such issues.
      9) Individual and collective portfolio management.
      11) Otherwise investing, administering or managing funds or money on behalf of other persons.
      12) Underwriting and placement of life insurance and other investment related insurance.
      13) Money and currency changing.
      should examine, as far as reasonably possible, the background and purpose of all complex, unusual large transactions, and all unusual patterns of transactions, which have no apparent economic or lawful purpose. Where the risks of money laundering or terrorist financing are higher, financial institutions should be required to conduct enhanced CDD measures, consistent with the risks identified. In particular, they should increase the degree and nature of monitoring of the business relationship, in order to determine whether those transactions or activities appear unusual or suspicious. Examples of enhanced CDD measures that could be applied for higher-risk business relationships include:
      • Obtaining additional information on the customer (e.g. occupation, volume of assets, information available through public databases, internet, etc.), and updating more regularly the identification data The term identification data refers to reliable, independent source documents, data or information. of customer and beneficial ownerBeneficial owner refers to the natural person(s) who ultimately owns or controls a customer and/or the natural person on whose behalf a transaction is being conducted. It also includes those persons who exercise ultimate effective control over a legal person or arrangement..
      • Obtaining additional information on the intended nature of the business relationship.
      • Obtaining information on the source of funds or source of wealth of the customer.
      • Obtaining information on the reasons for intended or performed transactions.
      • Obtaining the approval of senior management to commence or continue the business relationship.
      • Conducting enhanced monitoring of the business relationship, by increasing the number and timing of controls applied, and selecting patterns of transactions that need further examination.
      • Requiring the first payment to be carried out through an account in the customer’s name with a bank subject to similar CDD standards.

  Simplified CDD measures

  21. Where the risks of money laundering or terrorist financing are lower, financial institutions Financial institutions means any natural or legal person who conducts as abusiness one or more of the following activities or operations for or on behalf of a customer:
      1) Acceptance of deposits and other repayable funds from the public.
      2) Lending.
      3) Financial leasing.
      4) Money or value transfer services.
      5) Issuing and managing means of payment (e.g. credit and debit cards,cheques, traveller's cheques, money orders and bankers' drafts, electronic money).
      6) Financial guarantees and commitments.
      7) Trading in:
      a) money market instruments (cheques, bills, certificates of deposit, derivatives etc.);
      b) foreign exchange;
      c) exchange, interest rate and index instruments;
      d) transferable securities;
      8) Participation in securities issues and the provision of financial services related to such issues.
      9) Individual and collective portfolio management.
      11) Otherwise investing, administering or managing funds or money on behalf of other persons.
      12) Underwriting and placement of life insurance and other investment related insurance.
      13) Money and currency changing.
      could be allowed to conduct simplified CDD measures, which should For the purposes of assessing compliance with the FATF Recommendations, the word should has the same meaning as must. take into account the nature of the lower risk. The simplified measures should be commensurate with the lower risk factors (e.g. the simplified measures could relate only to customer acceptance measures or to aspects of ongoing monitoring). Examples of possible measures are:
      • Verifying the identity of the customer and the beneficial ownerBeneficial owner refers to the natural person(s) who ultimately owns or controls a customer and/or the natural person on whose behalf a transaction is being conducted. It also includes those persons who exercise ultimate effective control over a legal person or arrangement. after the establishment of the business relationship (e.g. if account transactions rise above a defined monetary threshold).
      • Reducing the frequency of customer identification updates.
      • Reducing the degree of on-going monitoring and scrutinising transactions, based on a reasonable monetary threshold.
      • Not collecting specific information or carrying out specific measures to understand the purpose and intended nature of the business relationship, but inferring the purpose and nature from the type of transactions or business relationship established.

      Simplified CDD measures are not acceptable whenever there is a suspicion of money laundering or terrorist financing, or where specific higher-risk scenarios apply.

  Thresholds

  22. The designated threshold for occasional transactions under Recommendation 10 is USD/EUR 15,000. Financial transactions above the designated threshold include situations where the transaction is carried out in a single operation or in several operations that appear to be linked.

  Ongoing due diligence

  23. Financial institutions Financial institutions means any natural or legal person who conducts as abusiness one or more of the following activities or operations for or on behalf of a customer:
      1) Acceptance of deposits and other repayable funds from the public.
      2) Lending.
      3) Financial leasing.
      4) Money or value transfer services.
      5) Issuing and managing means of payment (e.g. credit and debit cards,cheques, traveller's cheques, money orders and bankers' drafts, electronic money).
      6) Financial guarantees and commitments.
      7) Trading in:
      a) money market instruments (cheques, bills, certificates of deposit, derivatives etc.);
      b) foreign exchange;
      c) exchange, interest rate and index instruments;
      d) transferable securities;
      8) Participation in securities issues and the provision of financial services related to such issues.
      9) Individual and collective portfolio management.
      11) Otherwise investing, administering or managing funds or money on behalf of other persons.
      12) Underwriting and placement of life insurance and other investment related insurance.
      13) Money and currency changing.
      should be required to ensure that documents, data or information collected under the CDD process is kept up-to-date and relevant by undertaking reviews of existing records, particularly for higher-risk categories of customers.

The similar relationships to which financial institutions Financial institutions means any natural or legal person who conducts as abusiness one or more of the following activities or operations for or on behalf of a customer:
1) Acceptance of deposits and other repayable funds from the public.
2) Lending.
3) Financial leasing.
4) Money or value transfer services.
5) Issuing and managing means of payment (e.g. credit and debit cards,cheques, traveller's cheques, money orders and bankers' drafts, electronic money).
6) Financial guarantees and commitments.
7) Trading in:
a) money market instruments (cheques, bills, certificates of deposit, derivatives etc.);
b) foreign exchange;
c) exchange, interest rate and index instruments;
d) transferable securities;
8) Participation in securities issues and the provision of financial services related to such issues.
9) Individual and collective portfolio management.
11) Otherwise investing, administering or managing funds or money on behalf of other persons.
12) Underwriting and placement of life insurance and other investment related insurance.
13) Money and currency changing.
should For the purposes of assessing compliance with the FATF Recommendations, the word should has the same meaning as must. apply criteria (a) to (e) include, for example those established for securities transactions or funds transfers, whether for the cross-border financial institution as principal or for its customers.

The term payable-through accountsReferences to "accounts" should be read as including other similar business relationships between financial institutions and their customers. refers to correspondent accountsReferences to "accounts" should be read as including other similar business relationships between financial institutions and their customers. that are used directly by third parties For the purposes of Recommendations 6 and 7, the term third parties includes, but is not limited to, financial institutions and DNFBPs. Please also refer to the IN to Recommendation 17. to transact business on their own behalf.