The revised EDD Guideline includes clarifications on the EDD requirements for nominee directors and nominee partners, following sections 11 and 12 of the Anti-Money Laundering and Countering Financing of Terrorism (Requirements and Compliance) Amendment Regulations 2021. The EDD Guideline stresses at paragraphs 88 and 89 that reporting entities must conduct EDD on a company with one or more nominee directors, and on a limited partnership with a nominee general partner.
AML/CFT Programme Guideline
The AML/CFT Programme Guideline highlights a number of new standards:
- For designated business group (DBG), the Compliance Programme should describe the DBG structure and the division of shared and separate AML/CFT obligations where relevant.
- The reporting entity may wish to assess their residual risk, i.e., the risk after controls and mitigations.
- The reporting entity should vet staff at a higher level and/or on an ongoing basis depending on the risk profile of their role. For example, the Compliance Officer could be vetted every two years.
- Staff who conduct background checks on prospective or current staff should have the appropriate skills and experience to do so. Appropriate checks for staff with AML/CFT related duties include:
- Criminal checks;
- Politically exposed person checks;
- Reference checks; and
- checks to identify any employee’s secondary business interests that may present ML/TF risk.
- The reporting entity should complete appropriate vetting on existing employees, including those who transfer into a higher-risk role or those who have been in a high-risk role for an extended period.
- The Compliance Program should highlight how the reporting entity will apply AML/CFT training including:
- Delivery method
- Completion dates
- Completion rates
- If the reporting entity is providing products and services that favour anonymity (e.g., products that permit online transactions that conceal or disguise beneficial ownership), the reporting entity should implement effective monitoring controls to ensure that the account holder does not permit another person to operate the account.
- The Compliance Programme should address that when the reporting entity relies on another person or business to conduct CDD in their behalf, the person or business must:
- have a business relationship with the customer concerned;
- have conducted CDD to at least the standard required by the Act;
- provide the reporting entity with relevant identity information before a business relationship is established, or an occasional transaction or activity is conducted; and
- provide the reporting entity with relevant verification information on request (within five working days from the request).
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