The Consultative Committee of Accountancy Bodies (CCAB) has issued supplementary Anti-Money Laundering (AML) guidance on the completion of Client Due Diligence (CDD) during urgent work.

The supplementary guidance provides further detail, in the context of COVID-19, on the principles which underlie existing rules set out in Regulation 30 of the Money Laundering Regulations 2017 (MLR17).

  • Current CCAB AML guidance makes it clear that the default position on CDD is that it should be completed before entering into a business relationship.
  • Regulation 30 recognises that there may be circumstances where CDD needs to be completed while the business relationship is established rather than before. For example, where a client has a pressing or urgent need for services.
  • Regulation 30(3) allows CDD to be completed while establishing a business relationship provided that client verification is completed as soon as practicable after the first contact is established and
    • This is necessary not to interrupt the normal conduct of business.
    • There is little risk of money laundering and terrorist financing.

In the context of COVID-19, the CCAB advises that:

  • A 'pressing or urgent need for services' should be caused by circumstances which are outside of the client’s control.
  • This means that services required to meet usual or normal commercial deadlines do not meet the test (e.g. services to meet the normal filing deadline for preparation and submission of accounts).
  • The types of services which may meet the test include, an urgent review of cashflows and business funding in connection with bank finance and an urgent need to agree a time to pay arrangement with HMRC.
  • If a firm applies regulation 30(3), this should be approved by the Money Laundering Reporting Officer (MLRO) and any CDD must be completed by the time the final work is provided to the client.

Useful guides on this topic

AML: Identification and Verification, Individuals
What checks are required under AML rules for identification and verification? What is covered in identification? How do you verify ID?

AML: Identification and Verification, Entities
These are specifically related to UK private companies, Limited Liability Partnerships (LLPs) and partnerships (other than LLPs). What checks are required under AML rules for identification and verification? What is covered in identification? How do you verify ID?

COVID-19: Time to Pay
Business and self-employed taxpayers with outstanding tax liabilities may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service.

AML: Anti-Money Laundering Zone
Anti-Money Laundering (AML) Zone takes you to our supporting AML guides, checklists and articles.

External link

CCAB Supplementary COVID-19 AML Guidance

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