Non-resident customers or those from high risk jurisdictions
Enhanced Due Diligence (EDD) is required, under the AML/CFT Act 2009, when a reporting entity establishes a business relationship with a customer (even if occasional) that is a non-resident customer from a country that has insufficient anti-money laundering and countering financing of terrorism systems or measures in place.
But how do you know what it is, as a reporting entity, you are obliged to do under the Act and furthermore…how do you know if the country your customer is resident in has sufficient measures and controls in place that meet New Zealand standards…and lastly, are there exceptions to the rule or other criteria outside of non-residency that you need to take into account?
Dimension GRC have embedded the following link into their customer onboarding process so that this component of EDD is available for real time assessment.
https://www.knowyourcountry.com/country-ratings-table
This will enable you to review the risk a customer poises your business should they reside outside of New Zealand. Please note: your risk assessment will also provide guidelines for those countries outside the high risk ratings.
Furthermore, the DIA have developed an easy to follow Code of Practise which allows you to ensure you have the correct policies, processes and controls in place.
https://www.dia.govt.nz/pubforms.nsf/URL/AMLCFT_CAG_July2012.pdf/$file/AMLCFT_CAG_July2012.pdf
In addition, to effectively manage the money laundering risks that your firm faces you should:
- undergo Adverse Media, Sanction and Politically Exposed Person’s checks through a reliable data source;
- be alert to unexpected instructions to undertake transactions relating to one of those jurisdictions where this is outside of your normal practice;
- be alert to unexpected increases in instructions to undertake transactions relating to one of those jurisdictions or where the instructions are unusual given your understanding of normal practice in those jurisdictions;
- be alert to large asset transfers out of those jurisdictions;
- consider undertaking further due diligence checks if you are not sure who you are dealing with and ask more questions about the source of funds and purpose of the transaction; and
- have a process for checking clients against the sanctions lists where they have a connection with a jurisdiction which is on the sanctions list
Dimension GRC has partnered with international data providers to ensure you can conduct EDD in real time therefore mitigating risk to your organisation and ensuring a compelling customer experience.
