What steps do you take for a AMLD check?
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A legally correct customer due diligence research conducted according to the Anti Money Laundering Directive (AMLD) consists of a few components. These components ultimately form an extensive file for your client.
First things first
A customer due diligence ultimately revolves around one question: "who do you do business with?" In the context of the AMLD, some additional requirements are added to the customer due diligence, but you still start at the beginning; name and address details. For a person, you can think of a first and last name, address details and date of birth. For legal entities you will often find the answers in the Chamber of Commerce registration. Our CDD On Demand platform is linked to the (Dutch) Chamber of Commerce so that this information is entered automatically. Once you have this information, it is important to verify it. You can check the data on the basis of an identity document.
An institution subject to the AMLD is also obliged to find out the Ultimate Beneficial Owner (UBO). If you are dealing with a client who is a legal entity, you will almost always be dealing with a UBO. In practice, this isn't such a simple step because the company structure is often complicated. To make it as easy as possible for you, CDD On Demand provides a clear overview of the company structures. Within seconds the software indicates; who the UBO is, who possibly is the UBO or who most likely knows who the UBO is and you will receive a nice report on this. In addition, you can then carry out the customer due diligence at the touch of a button. (We only offer the UBO service for Dutch companies)
There are three types of customer due diligence: simple, standard and enhanced. In order to place your client in one of these risk categories, you need some more background information, which you try to find in the so-called compliance check. A number of high risk factors have been identified on the basis of which you should conduct an in-depth investigation. Some examples of this are:
- Politically Exposed Persons and their family
- Active or historical sanctions;
- A person or company that is supervised by a financial regulator (e.g. the AFM);
If you find out that your client "has" one or more of these risk factors, you must conduct a more stringent customer due diligence. In the CDD On Demand solution, eleven risk factors are automatically checked, giving you a quick overview of the possible risks that a business relationship with your client entails.
If you have noted the name and address details, have a risk categorization and have carried out a corresponding customer due diligence, your file is complete. However, it is mandatory to check this file regularly for changes. For example, it could be that your client suddenly holds a political office or that a company comes under the supervision of financial regulators. Keeping the file up-to-date can be forgotten if it is not done automatically periodically. The CDD On Demand monitor function checks your file on a daily basis and notifies you of a change, so you will never be left behind.
Would you like to know more about CDD On Demand? You can contact us or request a free trial account to try it yourself.