AML : CDD

Question 1

There are 3 stages of CDD that a business must undertake to understand a client’s identity, what are these?

Answer 1

Identification
Risk assessment
Verification

Question 2

You have been asked to act for an LLP but are unsure what ID you need to comply with AMLGAS, how should it be treated?

Answer 2

The LLP should be treated like a body corporate

Question 3

Who identifies the beneficial owner of a deceased person’s estate for the purpose of verifying the identity of the owners?

Answer 3

The executor

Question 4

To what extent should a tax adviser investigate whether a new client is a family member or known close associate of a PEP?

Answer 4

The adviser should check information either in the public domain or already in their possession

Question 5

In order of strength, what are the various forms of documentary evidence for client verification purposes?

Answer 5

A court order (e.g companies house doucments)
A council tax bill from a local authority
A bank statement
A letter from an ATT member

Question 6

You are not able to complete the necessary verification procedures before an engagement has begun as it would have interrupted the normal conduct of business, what should you do?

Answer 6

Complete the CDD as soon as practicable, provided there is little risk of MLTF

Question 7

How often should CDD be repeated for clients?

Answer 7

When there is a significant change to the client’s business or the client relationship may mean further due diligence is required

Use period routine reviews to update DD

Question 8

What should you do when relying on third party CDD checks?

Answer 8

Obtain copies of ID from third party

Question 9

When verifying a new client’s identity, what is the most satisfactory form of ID?

Answer 9

Passport

Question 10

Before beginning to act for a client which is a private limited company, what information is required to be obtained and verified?

Answer 10

Shareholders/members who own or control 25% of the shares or voting rights or any individual who otherwise exercises control
Names of board members and senior persons responsible for operations
Company name and number

Question 11

True or false, a memorandum of association is required when verifying a private limited company?

Answer 11

False

Question 12

Out of passport, PAYE coding notice and a letter from a local authority indicating entitlement to housing benefit, rank from most to least useful for CDD?

Answer 12

Passport
PAYE coding notice
Letter from a local authority

Question 13

When should EDD be carried out?

Answer 13

Where a transaction is complex and unusually large
When a potential client is determined to be a PEP