29: Customer Due Diligence

Question 1

Do you still need to perform CDD on a client that you have known for a very long time? Please expand on the answer (2)

Answer 1

Yes. It is a legal requirement to perform CDD.

• You may have a perceived perception of knowing the client but it is important to remain independent and periodically perform CDD.

Question 2

What are the main THREE components to performing a good business CDD? (3)

Answer 2

1. Verify the client - ID checks
2. Verify the BENEFICIAL OWNERS - Understand the management and business structure.
3. Understand the nature and purpose of the BUSINESS RELATIONSHIP

Question 3

How should you determine the level of CDD to perform? (1)

Answer 3

Must adopt the RISK BASED approach (Chapter 28)

Question 4

If a business has suspicion or knowledge of a client engaging in money laundering activites, does the business need to perform CDD? (2)

Answer 4

Yes. If the business has suspicions or knowledge they must perform CDD if there are any doubts of identification or authenticity of verification

They must also consider whether to make an SAR to the NCA.