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Customers Carry Out Transactions on Behalf of Same Person, Sparking Concerns
A number of customers have sent money transfers to the same individual, raising suspicions among authorities about potential money laundering activities.
Enhanced Due Diligence Measures
In situations where there is a higher risk of money laundering, such as when customers are not physically present during identification checks or when dealing with politically exposed persons, businesses must carry out enhanced due diligence measures. These include:
- Obtaining further information to establish the customer’s identity
- Applying extra measures to check documents supplied by a credit or financial institution
- Verifying that the first payment is made from an account opened in the customer’s name
- Determining where funds have come from and what the purpose of the transaction is
Transactions Through Financial Corridors
Businesses must also be cautious when dealing with transactions that pass through financial corridors, which are routes used to transfer money to high-risk jurisdictions. This can make it difficult to establish the ultimate beneficiary of a transaction.
In such cases, businesses must carry out enhanced due diligence measures and monitor transactions closely to prevent money laundering activities.
Internal Controls and Ongoing Monitoring
To combat money laundering, businesses must have adequate internal controls and monitoring systems in place. These should alert employees if suspicious activity is detected, allowing them to take steps to prevent it and report any irregularities.
Suspicious Transactions and Activities
Businesses must be vigilant for unusual transactions or activities that may indicate money laundering. This includes:
- Transactions that are unusually large
- Customers who behave strangely
- Requests that do not make commercial sense
Policy Statement and Record Keeping Requirements
A policy statement is a document that outlines a business’s approach to preventing money laundering. It should include details of customer due diligence measures, procedures for identifying and verifying customers, and monitoring controls.
Businesses must also keep comprehensive records of all customer due diligence measures carried out, including customer identification documents obtained. These records must be kept for five years beginning from the date a business relationship ends or a transaction is completed.
More Information
For more information on anti-money laundering guidance for company service providers, please download our document here:
[Link to document]
Additionally, you can find guidance on transparency beneficial ownership here:
[Link to document]