CDD On Demand for tax advisors and accountants

AMLD for tax advisors and accountants

The AMLD came into effect on 1 August 2008. Client due diligence and the duty to report are at the heart of the AMLD. The purpose of the AMLD is to combat the laundering of proceeds from crime and the financing of terrorism in order to safeguard the integrity of the financial and economic system. As a tax advisor or accountant, you do not have to determine whether there is money laundering in the sense of criminal law. It is sufficient for the tax adviser or accountant to recognize unusual transactions and report them to Financial Intelligence Unit the Netherlands.

The AMLD is based on two principles: Customer Due Diligence (CDD) and the obligation to report unusual transactions. CDD is the process by which relevant information about the customer is collected and assessed for potential risk to the organization or money laundering / terrorist financial activities. An important part of this is conducting client research, with a risk orientation. Depending on the identified risk, as a tax advisor or account, you will need to conduct a normal or an enhanced investigation.

Client research

According to the AMLD a client research consists of several steps.

1.

The first step is to identify the client and record this information.

2.

The second step consists of verifying the identity of the client, during which the tax advisor or accountant checks whether the client data corresponds to a valid ID according to the AMLD. The AMLD allows for making a copy of the ID, this is not in violation of privacy laws. Under the AMLD, the data of the client research should be kept for 5 years.

3.

The third step should only be done if a tax advisor or accountant does business with a legal entity. In this case, the tax advisor or accountant must find out who the Ultimate Beneficial Owner (UBO) is. This is the shareholder with more than 25% of the shares.

4.

The fourth step is to check whether the person with whom the tax advisor or accountant is doing business is on a PEP or other sanctions list. The measures with regard to PEPs are preventive in nature. This means that a PEP is not necessarily involved in criminal activities. Rejecting a business relationship just because a client or UBO is a PEP does not comply with the principles of the AMLD.

1.

2.

3.

4.

The first step is to identify the client and record this information.

The second step consists of verifying the identity of the client, during which the tax advisor or accountant checks whether the client data corresponds to a valid ID according to the AMLD. The AMLD allows for making a copy of the ID, this is not in violation of privacy laws. Under the AMLD, the data of the client research should be kept for 5 years.

The third step should only be done if a tax advisor or accountant does business with a legal entity. In this case, the tax advisor or accountant must find out who the Ultimate Beneficial Owner (UBO) is. This is the shareholder with more than 25% of the shares.

The fourth step is to check whether the person with whom the tax advisor or accountant is doing business is on a PEP or other sanctions list. The measures with regard to PEPs are preventive in nature. This means that a PEP is not necessarily involved in criminal activities. Rejecting a business relationship just because a client or UBO is a PEP does not comply with the principles of the AMLD.

Sharpened client research

The law requires stricter customer due diligence if there is an increased risk of money laundering or terrorist financing due to the nature of the business relationship or the transaction or in connection with the state where the customer resides, is established or has its registered office. In addition, stricter customer due diligence is mandatory for the identification of natural persons without a physical presence; when providing services to Politically Exposed Persons (PEPs) or clients with a Controlling Person who is a PEP.

A stricter customer due diligence could mean that the tax adviser or accountant must assess documents for authenticity, the presence of a code of conduct and / or whistleblower's scheme at the client or obtaining a VOG statement from the legal entity.

SCOPE CDD On Demand for tax advisors and accountants

With the SCOPE CCD On Demand you can screen your client quickly and easily. SCOPE CDD On Demand screens the client on the following:

UBO check (Dutch companies only)

In addition, SCOPE CDD On Demand also allows you to perform a UBO check that attempts to find out who the UBO of a company is. If your client is not a natural person, you are obliged to determine who the parties/individuals with an interest in the client are. The audit via SCOPE CDD On Demand automatically requests these records from the Chamber of Commerce. These extracts are analyzed to map the involved individuals and businesses. Using the mapped data an attempt is made to determine the individual(s) that should be classified as the UBO(s).

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