Frequently Asked Question

AML: reliance on third party (accountant or adviser)
Last Updated 4 years ago

CCAB Guidance on AML procedures for the Accountancy sector
This is an extract from guidance

5.4 Can reliance be placed on other parties?

5.4.1 Businesses are permitted to rely on certain other parties (subject to their agreement) to complete all or part of CDD.

5.4.2 This is permitted only if the other party is a member of the regulated sector in the UK, or subject, in an EEA or non-EEA state, to an equivalent regulatory regime which includes compliance supervision requirements equivalent to the EU Directive.

5.4.3 Businesses should note that where one party places reliance on another they must enter into an agreement (that should be in writing) to ensure that the other party will provide the CDD documentation immediately on request. An arrangement of this kind can be useful and efficient when the two parties are able to build a relationship of trust, but it should not be entered into lightly. Liability for inadequate CDD remains with the relying party. Businesses placing reliance on another should satisfy themselves with the level of CDD being undertaken. Parties seeking reliance

5.4.4 A business relying on a third party in this way is not required to apply standard CDD, but it must still carry out a risk assessment and perform ongoing monitoring. That means it should still obtain a sufficient quantity and quality of CDD information to enable it to meet its monitoring obligations.

5.4.5 In addition, the business seeking to rely on a third party remains liable for any CDD failings irrespective of the terms of the CDD agreement.

5.4.6 If relying on a third party, businesses must obtain copies of all relevant information to satisfy CDD requirements. They should also enter into a written arrangement that confirms that the party being relied on will provide copies of identification and verification documentation immediately on request.

Parties granting reliance

5.4.7 A business should consider whether it wishes to be relied upon to perform CDD for another party. Before granting consent, a business that is relied upon must ensure that its client (and any other third party whose information would be disclosed) is aware that the disclosure may be made to the other party and has no objection to the disclosure. It should make sure that:

• it has adequate systems for keeping proper CDD records;

• it can make available immediately on request:

o any information about the client/BO gathered during CDD; and/or o copies of any information provided during client/BO identity/verification or documentation obtained during CDD.

• It can keep those CDD records securely for five years after the end of the business relationship.

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