• AML/CFTR Part 4.1 AML/CFTR Part 4.1 Know your customer — general

    Note for Part 4.1

    Principle 3 (see rule 1.2.3) requires a firm to know each of its customers to the extent appropriate for the customer's risk profile.

    Derived by QFCRA RM/2019-8 (as from 1st February 2020)

    • AML/CFTR 4.1.1 Know your customer principle — general

      The know your customer principle requires every firm to know who its customers are, and to have the necessary customer identification documentation, data and information to evidence this.

      Note Principle 6 (see rule 1.2.6) requires a firm to be able to provide documentary evidence of its compliance with the requirements of the AML/CFT Law and these rules.

      Derived by QFCRA RM/2019-8 (as from 1st February 2020)

    • AML/CFTR 4.1.2 Overview of CDD requirements

      (1) As a general rule, a firm must not establish a business relationship with a customer unless:
      (a) all the relevant parties (including any beneficial owner) have been identified and verified; and
      (b) the purpose and intended nature of the business expected to be conducted with the customer has been clarified.
      (2) Once an ongoing relationship has been established, any regular business undertaken with the customer must be assessed at regular intervals against the expected pattern of activity of the customer. Any unexpected activity can then be examined to decide whether there is a suspicion of money laundering or terrorism financing.
      (3) If the firm does not obtain satisfactory evidence of identity for all the relevant parties, the firm must not establish the business relationship or carry out a transaction with or for them and must consider making a suspicious transaction report to the FIU.
      (4) This rule provides a simplified explanation of some of the customer due diligence requirements in this Chapter and is subject to the more detailed provisions of this Chapter.
      Derived by QFCRA RM/2019-8 (as from 1st February 2020)

    • AML/CFTR 4.1.3 Customer identification documents

      The application of CDD to a customer should result in the firm obtaining a set of documents which are collectively known as the 'customer identification documents'. These documents, which are summarised in figure 4.1.3, form the basis of the firm's knowledge of the customer and should drive the risk-profiling and therefore the intensity of the CDD and ongoing monitoring the firm must conduct for the customer.

      Figure 4.1.3 Customer identification documents

      Derived by QFCRA RM/2019-8 (as from 1st February 2020)