What is the FATF 40 recommendations?
The 40 Recommendations provide a complete set of counter-measures against money laundering (ML)covering the criminal justice system and law enforcement, the financial system and its regulation, and international co-operation. They have been recognised, endorsed, or adopted by many international bodies.
Which FATF Recommendation addresses customer due diligence?
FATF Recommendation 10
On March 31st the Financial Action Task Force (FATF)—the global AML/CFT standard-setting body and watchdog—announced that it has upgraded the United States for technical compliance with FATF Recommendation 10 following implementation of the U.S. Treasury’s new customer due diligence (CDD) requirements.
Where is CDD required?
The CDD Rule requires these covered financial institutions to identify and verify the identity of the natural persons (known as beneficial owners) of legal entity customers who own, control, and profit from companies when those companies open accounts.
Do CDD records need to be kept?
You must keep sufficient supporting records (original documents or copies) in respect of a transaction which is the subject of CDD measures or ongoing monitoring to enable the transaction to be reconstructed.
What are the customer due diligence CDD measures that must be taken in accordance with FATF Recommendation 10?
Financial institutions should be prohibited from keeping anonymous accounts or accounts in obviously fictitious names. (iv) the financial institution has doubts about the veracity or adequacy of previously obtained customer identification data.
Who is exempt from the CDD rule?
Exempted entities include, among others, domestic banks, bank holding companies, savings and loan holding companies, federal or state credit unions, and FinCEN-registered money services business; certain issuers of securities registered with the Securities and Exchange Commission; certain entities registered with the …
When should CDD be completed?
Ongoing monitoring: CDD is not a one-off obligation. Companies should perform CDD periodically throughout a business relationship in order to ensure that customers’ transactions are consistent with their established risk profiles.
What is CDD in AML?
Customer Due Diligence — Overview.
Is KYC and CDD the same?
For regulated entities, the KYC checks that sufficed in the past have now developed into CDD programmes, and the main difference between KYC and CDD, apart from the emphasis on the source of funds, is that the CDD checks continue throughout the client relationship.
How long should CDD be retained?
When the business relationship or occasional transaction has ended, you must keep records of CDD documents and supporting evidence for five years. After five years, you must delete personal data unless: express consent is given to retain that data.
How often should CDD be undertaken?
What are the four core elements of CDD?
The CDD Rule includes four core elements of customer due diligence, each of which should be included in the anti-money-laundering (AML) program of a CFI: (1) customer identification and verification, (2) beneficial ownership identification and verification, (3) understanding the nature and purpose of customer …
What is the CDD process?
CDD is the process where pertinent information of a customer’s profile is collected and evaluated for potential money laundering or terrorist financing risks. Upon completion of CDD, the customer may be given a risk rating in accordance with the risk he or she may present to the company.