We generally consider that these guidelines are conducive to firms adopting risk-based, but not always proportionate AML/CFT policies and procedures. We observe that customer due diligence (“CDD”) measures are risk sensitive in line with the general rules set out in the Directive (EU) 2015/849. However the assessment of risk is a delicate issue, which needs to be handled very carefully. As stated below, we believe that the guidelines are not to be observed in all cases. We find it essential to stress that not all factors are applicable in all cases, and that one factor as itself is no sufficient to imply a higher risk. While we agree with the points made in the Joint Guidelines overall, we have specific comments on the details of the document as set out attached.
We consider that these guidelines are conducive to competent authorities effectively monitoring firms’ compliance with applicable AML/CFT requirements in relation to individual risk assessments and the application of both simplified and enhanced customer due diligence measures. It’s crucial to be able to understand what the risks of money laundering are in order to adapt CDD measures to different situations. This requires determining the areas where the risk is higher whilst applying enhanced due diligence and giving the possibility to apply simplified due diligence when risks are lower. However, we believe that it is hard to distinguish the “normal” due diligence and the simplified due diligence (“SDD”). Most of the requirements for SDD in reality are the ones that are also applied for “normal” due diligence. For this reason we do not understand the criteria which makes the due diligence “lighter” in case of low risk (leading to apply SDD) since the same requirements very often apply in both cases. It would be helpful if this matter would be clarified with a specific guideline on the criteria that determine the due diligence in line with the level of risk and distinguish normal due diligence from SDD.
We believe that the organization of this consultation paper by types of business gives sufficient clarity on the scope of application of the AMLD to the various entities subject to its requirements. It is important to have an awareness and understanding of the risks in particular business areas.