What conditions must be met before delayed Customer Due Diligence?
Two conditions must be met on reasonable grounds before delay: it is essential to avoid interrupting the ordinary course of business and there is low additional ML/TF risk from the delay.
Before you can delay initial CDD for any customer, you must determine on reasonable grounds — before you start providing the designated service — that both of the following are true:
- It is essential to delay initial CDD to avoid interrupting the ordinary course of business
- There is a low additional risk of money laundering or terrorism financing occurring as a result of the delay
AUSTRAC has been explicit that it isn't sufficient to delay initial CDD simply because it would be inconvenient for the reporting entity or the customer, and that the entity must be able to demonstrate how it determined the ML/TF risk was low. AUSTRAC
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