CDD in 10 steps
Step 1 - Does the AML apply to you?
Reading time: 4 min
In short
The first step of the Customer Due Diligence (CDD) policy is to check whether you are subject to the AML. If you are subject to the AML, you are also obligated to comply with the AML. There is no need to comply with this legislation if the AML does not apply.
The AML uses the term "institution" to determine who is subject to the AML. Article 1a lists institutions such as banks, investment firms and institutions, exchange institutions, life insurers, financial service providers and payment service agents. In addition, natural persons, legal entities or companies practising a specific professional activity may also be subject to the AML.
There are three main categories that fall under the guidelines of the Wwft: banks, financial institutions and designated natural persons, legal persons or companies acting in the context of their professional activities
Three main categories
The term "institution" is divided into three main categories:
1.
2.
3.
Banks
Other financial companies
Designated natural persons, legal persons or companies acting in the context of their professional activities.
Other financial companies
- Investment institution
- Investment firm
- Mediator in life insurance
- Payment service agent
- Payment service provider acting on behalf of a payment service provider licensed in another EU Member State
- Payment service provider
- Electronic money institution
- Undertaking for Collective Investment in Transferable Securities (UCITS)
- Institution not being a bank that nevertheless carries out banking activities
- Life insurance company
- Lessor of safes
- Changeover institute
Professional activities designated as natural persons, legal entities or companies acting in the context of their professional activities include:
- Accountant
- Lawyer
- Tax advisor
- Domiciliary provider
- Buyer or seller of goods (with the exception of works of art)
- Buyer or seller of works of art
- Mediator in the purchase/sale of goods of great value
- Real estate agent
- Notary
- Pawnshop
- Casino
- Appraiser
- Trust office
- Professional or commercial provider of services for switching between virtual currencies and fiat currencies
- Professional or commercial provider of custodial wallets
This list has been compiled based on data from FIU-the Netherlands. If you pass step 1, it is time to move on to the next step. Read more about this in our next blog - Identify your client.