Mar 2020
Our top tips on best practice
You must meet certain day-to-day responsibilities if your business is covered by the Money Laundering Regulations or if you just want to protect your business from such risks and work on a best practice basis. These include carrying out ‘customer due diligence’ measures to check that your customers are who they say they are.
Here are our 5 top tips for carrying out customer due diligence:
- Identity – who is your client? Is it a company or individual? Who are the key players and how can you identify them?
- It is important to work out what documents you need, can you go to Companies House and find out the main shareholders or do you need to approach the client directly;
- Get ID documents, passport, driving licence and proof of address;
- Make sure they match the details you hold and if in doubt 2 documents are better than one, cross compare!
- Validity of documentation – Where has your proof of ID come from, is it via the accountant, your client directly or from a trusted search site?
- You have to be happy that the ID documentation you have been provided is valid and you can rely upon it;
- You can use the details and enter them into subscribed search sites that provide a report on the individual or company flagging and potential risks;
- Alternatively you can take original copies or ask a trusted professional such as a solicitor to provide a certified or notarised copy of the document.
- Source of funds – As with getting ID, you may want to know where your client’s money has come from. This is a bit harder and can create an awkward conversation. Practically speaking you may wish to only request proof for the source of your client funds if you are dealing with large sums of money. You can ask for proof of investment, bank statements or where a business is concerned look at a recent cashflow forecast.
- Policy – Do you have a policy, what will be your procedures and how will you train your staff? There is lots of guidance online and specifically on the Direct Gov websites regarding anti money laundering but we can also assist you in drafting a work based policy that you can provide to staff and any third parties who may want to know what your procedures are.
- Record – Keep records! All this protection is to benefit you in the event something goes wrong and you can show you did your best to prevent any such risks. It will also help you where you have repeat business from asking clients to provide their documents over and over again. Make record keeping part of your policy but remember these records will need to be kept in line with GDPR guidelines which we can also assist with!
If you would like any help with money laundering or GDPR guidance or workplace policies generally please contact our Corporate Commercial team.
