ANTI MONEY LAUNDERING
Client onboarding Onboarding is the start of your business relationship with your client. It is essential to take anti money laundering regulations into consideration from the outset, as Richard Simms explains.
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Richard Simms Managing director, AMLCC
relationship. This is so you can properly manage any money laundering, terrorist financing or proliferation financing risks.
Where do you start?
Onboarding is the start of your business relationship with your client. You’re keen to get going. But before you do, you need to know that this new client doesn’t pose you any risk – for your own sake, as well as for the safety of the wider economy. There are three key steps to how you determine that risk. 1. Identification: This is the first stage of gathering information about the identity of the client, the purpose and nature of the intended business relationship and the source of funds. In the case of companies and other organisations, you must establish the identity of who ultimately owns or controls the client (the ultimate beneficial owner). 2. Risk assessment: Next, carry out an initial risk assessment based on the information gathered. This involves evaluating the potential risks and vulnerabilities that a client may pose in terms of money laundering, terrorist financing and proliferation financing. You should consider a ISSUE 130 | AIAWORLDWIDE.COM
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hen you onboard a client, do you take anti money laundering (AML) into consideration? Many accountants I speak to have used the same onboarding process for years. They collect some information about their client, take a passport copy… and that’s it. Many are unaware that this does not constitute sufficient checks and, in fact, means they are non-compliant with AML regulations. So what should you be doing and why should you follow the regulations to the letter? Complying with the AML regulations is a vital part of your responsibility to maintain the integrity and trustworthiness of the accounting profession. In view of this, the regulations set out specific guidelines to be adhered to by accountants and other regulated professionals. Failure to comply can also lead to severe penalties, including fines, disciplinary action and even imprisonment. The fundamental purpose of a comprehensive onboarding process and client due diligence is to make sure you know and verify a client’s identity, their business activities (including in many cases the source of funds) and the nature and purpose of the