If you provide a designated service as defined in Section 6 of the AML/CTF Act you must implement customer due diligence procedures for all your customers.
Customer due diligence includes both:
Your AML/CTF program should be drafted to outline your customer due diligence procedures. The procedures you implement must be risk-based and should be informed by your business and customer risk assessments.
You must check a customer’s identity by both collecting, and verifying Know Your Customer (“KYC“) information before providing any designated services to them. After conducting customer due diligence, you must establish on reasonable grounds:
Reasonable grounds is an objective standard. How you go about establishing these matters on reasonable grounds should include:
The AML/CTF Rules set out the minimum information you will need to collect to identify a customer’s ML/TF/PF risk. You must then determine if you require further information, which information should be verified and whether enhanced CDD should be conducted, based on your ML/TF/PF risk assessment of the customer.
More KYC information should be collected and verified in relation to a customer with higher ML/TF/PF risk (including information about their beneficial owners). It’s also important to consider whether the customer’s request for designed services seems unusual – if it does, enhanced CDD should be conducted.
Verifying KYC information must be via reliable and independent data – and can be completed manually by the reporting entity (such as via checking a customer’s driver’s licence) or electronically through an outsourced service provider.
Simplified customer due diligence can be carried out on certain low-risk customers. It is not an exemption from collecting and verifying KYC information, but rather means you will have been taken to have established certain matters.
You must complete Customer Due Diligence before you provide any designated services to the customer. This applies to both one-off transactions and ongoing business relationships. However, there are some limited exceptions to this obligation.
You must monitor your customers to identify, assess, manage and mitigate the ML/TF/PF risks you may face when providing designated services. This must occur throughout the course of the customer relationship.
Ongoing CDD includes:
Please refer to AUSTRAC’s website for more customer identification and verification requirements.
Sophie Grace can provide you with an AML/CTF Program and can assist you to tailor it to your business’ needs. We have three different options available to suit your business and finance needs:
You can purchase template documents from our online shop. The templates are instant downloads and include prompts to help you tailor the document yourself.
Sign up to the Compliance Portal to receive the template AML/CTF Program Package, and obtain access to updated documents in light of any updates we make as new guidance or amended legislation is released.
Sophie Grace can assist you to prepare the AML/CTF Program package based on your business’ specific requirements. Contact us to discuss further.
For additional information or assistance, please contact Sophie Grace directly.
Sophie Grace can provide you with an AML/CTF Program and can assist you to tailor it to your business’ needs. We have three different options available to suit your business and finance needs.
You can purchase template documents from our online shop. The template is an instant download and includes prompts to help you tailor the document yourself. We have template documents for:
Sign up to the Compliance Portal and receive the template AML/CTF Program Package, and obtain access to updated documents in light of any updates we make as new guidance or amended legislation is released. Choose between:
Sophie Grace can assist you to prepare the AML/CTF Program package based on your business’ specific requirements. Contact us to discuss further.
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