• AMLG Chapter 4 AMLG Chapter 4 Know your customer

    • AMLG Part 4.1 AMLG 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/2019-9 (as from 1st February 2020)

      • AMLG 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/2019-9 (as from 1st February 2020)

    • AMLG Part 4.2 AMLG Part 4.2 Know your customer — key terms

      • AMLG 4.2.1 What is ongoing monitoring?

        Ongoing monitoring, in relation to a customer of a firm, consists of:

        (a) scrutinising transactions conducted under the business relationship with the customer to ensure that the transactions are consistent with the firm's knowledge of the customer, the customer's business and risk profile, and, where necessary, the source of the customer's wealth and funds; and
        (b) reviewing the firm's records of the customer to ensure that documents, data and information collected using CDD and ongoing monitoring for the customer are kept up-to-date and relevant.
        Derived by QFCRA RM/2019-9 (as from 1st February 2020)

      • AMLG 4.2.2 Who is an applicant for business?

        An applicant for business, in relation to a firm, is a person seeking to form a business relationship, or carry out a one-off transaction, with the firm.

        Examples of applicants for business

        1 A person dealing with a firm on his or her own behalf is an applicant for business for the firm.
        2 If a person (A) is acting as agent for a principal in dealing with a firm and A deals with the firm in his or her own name on behalf of a client of the principal, A (and not the client) is an applicant for business for the firm.
        3 If an individual claiming to represent a company, partnership or other legal person applies to a firm to conduct business on behalf of the legal person, the legal person (and not the individual claiming to represent it) is an applicant for business for the firm.
        4 If a company manager or company formation agent (C) introduces a client company to a firm, the client company (and not C) is an applicant for business for the firm.
        Derived by QFCRA RM/2019-9 (as from 1st February 2020)

    • AMLG Part 4.3 AMLG Part 4.3 Enhanced CDD and ongoing monitoring

      • AMLG 4.3.1 Enhanced CDD and ongoing monitoring — general

        A firm must, on a risk-sensitive basis, conduct enhanced CDD and enhanced ongoing monitoring:

        (a) in cases where it is required to do so under the AML/CFT Law or these rules;
        (b) if required by the Regulator or the NAMLTF Committee to do so;
        (c) in cases where the Financial Action Task Force calls upon its members to require enhanced CDD and enhanced ongoing monitoring; and
        (d) in any other situation that by its nature can present a higher risk of money laundering or terrorism financing.

        Examples

        A greater degree of CDD and monitoring would be necessary in the following cases:
        •   a customer who is associated with terrorist acts
        •   a customer from a jurisdiction with impaired international cooperation
        •   a customer from a non-cooperative, high risk or sanctioned jurisdiction
        •   a customer from a jurisdiction with high propensity for corruption.
        Derived by QFCRA RM/2019-9 (as from 1st February 2020)

      • AMLG 4.4.2 Measures required for enhanced CDD or ongoing monitoring

        A firm that is required to conduct enhanced CDD or enhanced ongoing monitoring must include the following measures, as appropriate to either or both requirements:

        (a) obtain additional information about the customer (for example, profession, volume of assets and information available through public databases and open sources);
        (b) update customer identification and beneficial owner identification;
        (c) obtain additional information on the purpose and intended nature of the business relationship;
        (d) obtain additional information on the sources of the customer's wealth and funds;
        (e) obtain information on the reasons for the expected transactions or the transactions that have been carried out;
        (f) obtain senior management approval before establishing or continuing a business relationship;
        (g) implement additional and continuous controls by identifying transactions and patterns of transactions that need additional scrutiny and review;
        (h) make the first of any required payments to the customer through an account in a bank that is regulated and supervised (at least for AML and CFT purposes) by the Regulator or by an equivalent regulatory or governmental authority, body or agency in another jurisdiction.
        Derived by QFCRA RM/2019-9 (as from 1st February 2020)

      • AMLG 4.4.3 Other measures in addition to enhanced CDD and ongoing monitoring

        In addition to the enhanced CDD and enhanced ongoing monitoring in this Part, a firm must conduct, on a risk-sensitive basis:

        (a) countermeasures proportionate to the risks specified in circulars published by the NAMLTF Committee based on relevant findings of international organisations, governments and other bodies; and
        (b) other measures determined by the NAMLTF Committee on its own initiative.
        Derived by QFCRA RM/2019-9 (as from 1st February 2020)