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6.6. Failure to conduct or complete Customer Due Diligence
FINANCIAL SERVICES LEGISLATION
RULES
ANTI-MONEY LAUNDERING AND COUNTER-TERRORIST FINANCING AND SANCTIONS RULES
Figure 1 – The Risk Based Approach
Figure 2 – Customer Risk Assessment
Entire Act

6.6. Failure to conduct or complete Customer Due Diligence

6.6.1. Prohibitions

Where, in relation to any customer, a Relevant Person is unable to conduct or complete the requisite CDD in accordance with AML 6.3.1 it must, to the extent relevant:

  1. (a) not carry out a transaction with or for the customer through a bank account or in cash;
  2. (b) not open an account or otherwise provide a service;
  3. (c) not otherwise establish a business relationship or carry out a transaction;
  4. (d) terminate or suspend any existing business relationship with the customer;
  5. (e) [intentionally omitted]; and
  6. (f) consider whether the inability to conduct or complete CDD necessitates the making of a STR (see Chapter 13).
  7. A Relevant Person is prohibited from knowingly keeping anonymous accounts or accounts in obviously fictitious names.

6.6.2. Exceptions

A Relevant Person is not obliged to comply with AML 6.6.1</a>(a) to (e) if:

  1. (a) to do so would amount to "tipping off" the customer, in contravention of the AML Law; or
  2. (b) the FIU directs the Relevant Person to act otherwise.

Guidance on failure to conduct or complete Customer Due Diligence

  1. (a) Where CDD cannot be completed, it may be appropriate not to carry out a transaction pending completion of CDD. Where CDD cannot be conducted, including where a material part of the CDD, such as identifying and verifying a beneficial owner cannot be conducted, a Relevant Person should not establish a business relationship with the customer.
  2. (b) A Relevant Person should note that AML 6.6.1 applies to both existing and prospective customers. For new customers, it may be appropriate for a Relevant Person to terminate the business relationship before a product or service is provided. The Relevant Person should be careful not to "tip off" the customer.
  3. (c) A Relevant Person should adopt the RBA for CDD of existing customers. For example, if a Relevant Person considers that any of its existing customers have not been subject to CDD at an equivalent standard to that required by these Rules, it should adopt the RBA and take remedial action in a manner proportionate to the risks and within a reasonable period of time whilst complying with AML 6.6.1.