Anti-Money Laundering & Counter-Terrorism Financing
Can banks rely on EAMs to conduct CDD on customers?
Paragraph 9.2 of MAS Notice 626 allows banks to rely on a third party to perform CDD measures at onboarding if specific requirements are met.
In general, the bank needs to be satisfied that the third party is supervised for AML/CFT requirements consistent with the standards set by the FATF, and has adequate AML/CFT measures in place. It is therefore important for EAMs to establish good working relations with their partner banks and help banks familiarise with the EAM's customer and AML/CFT controls.
Notwithstanding, banks may still prefer to perform CDD on the customer themselves (particularly for higher risk, private wealth customers) in accordance with their own AML/CFT policies and procedures instead of relying on regulated third parties. To ensure a smoother process in establishing banking relationships on behalf of customers, EAMs should be prepared to:
• Provide all the identification and verification information and documents of the customer, connected parties, natural persons appointed to act on the customer's behalf, and beneficial owners;
• Provide comprehensive descriptions and supporting documentation of the customer's source of wealth and source of funds. These should be accompanied by corroborative evidence from independent and credible sources; and
• Explain their AML/CFT policies and procedures and controls in relation to onboarding to enhance the bank's understanding.