6.2.1. Establishment of business relationship

A Relevant Person must conduct CDD measures:

1. (a) when it is establishing a business relationship with a customer; and
2. (b) after establishing a business relationship with a customer.

6.2.2. After the establishment of a business relationship

A Relevant Person must also conduct appropriate CDD if, at any time:

1. (a) in relation to an existing customer, it doubts the veracity or adequacy of documents, data or information obtained for the purposes of CDD;
2. (b) it suspects money laundering; or
3. (c) there is a change in the risk rating applied by the Relevant Person to an existing customer, or it is otherwise warranted by a change in circumstances of the customer

6.2.3. Establishing a business relationship before Customer Due Diligence is complete

A Relevant Person may establish or retain a business relationship with a customer before completing the verification required by AML 6.3.1 if the following conditions are met:

1. (a) deferral of the verification of the customer or beneficial owner is necessary in order not to interrupt the normal conduct of a business relationship;
2. (b) risk management procedures concerning the conditions under which a customer may utilise the business relationship prior to verification have been adopted and are in place; and there is little risk of money laundering occurring and any such risks identified can be effectively managed by the Relevant Person;
3. (c) in relation to a bank account opening, there are adequate safeguards in place to ensure that the account is not closed and transactions are not carried out by or on behalf of the account holder (including any payment from the account to the account holder) before verification has been completed; and
4. (d) subject to (c), the relevant verification is completed as soon as reasonably practicable before or during the establishment of a business relationship and when transactions for occasional customers are being conducted; and in any event, no later than 30 days after the establishment of a business relationship.

6.2.4. Inability to complete Customer Due Diligence within 30 days

Where a Relevant Person is not reasonably able to comply with the 30-day requirement in AML 6.2.3(d), it must, prior to the end of the 30-day period:

• (a) document the reason for its non-compliance;
• (b) complete the verification in AML 6.2.3 as soon as possible; and
• (c) record the non-compliance event.

6.2.5. Cessation of business

The AFSA may specify a period within which a Relevant Person must complete the verification required by AML 6.2.3 failing which the AFSA may direct the Relevant Person to cease any business relationship with the customer.

Guidance on timing of Customer Due Diligence

1. (a) For the purposes of AML 6.2.2(a), examples of situations which might lead a Relevant Person to have doubts about the veracity or adequacy of documents, data or information previously obtained could be where there is a suspicion of money laundering in relation to that customer, where there is a material change in the way that the customer's account is operated, which is not consistent with the customer's business profile, or where it appears to the Relevant Person that a person other than the customer is the real customer.
2. (b) In AML 6.2.3, situations that the Relevant Person may take into account include, for example, accepting subscription monies during a short offer period; executing a timecritical transaction, which if not executed immediately, would or may cause a customer to incur a financial loss due to price movement or loss of opportunity; and when a customer seeks immediate insurance cover.
3. (c) When complying with AML 6.2.1, a Relevant Person should also, where appropriate, consider AML 6.6.1 regarding failure to conduct or complete CDD and Chapter 13 regarding STRs and tipping off.