Standard operating procedure

Levels of customer due diligence

Levels of customer due diligence

First AML conducts Customer Due Diligence in line with the Act as outlined below.
Here, we highlight  the criteria for what falls into each level,
and how First AML conducts checks for each.

Simplified due diligence
Standard due diligence
Enhanced due diligence

Simplified Due Diligence

Criteria

First AML will conduct Simplified Due Diligence when the customer is:

  1. A government department
  2. A publicly listed company or subsidiary of a listed parent company with >50% shareholding of the engaging private company
  3. A crown entity

Please see the full list of qualifying entities in the AML/CFT Act Section 18(2).

What do we collect?

First AML will collect information regarding the simplified entity and note the relevant legislation that qualifies the customer for simplified due diligence. 

For a publicly listed company or company majority-owned by a publicly listed company, we will collect the following information:

  • Company full legal name;
  • Company number or other registration numbers;
  • Stock ticker symbol;
  • Registered office address and, if different, the principal place of business; and
  • Evidence confirming the company’s publicly listed status or if this is a subsidiary, evidence of the parent/subsidiary relationship will be obtained.

Acting on Behalf

‘Acting on behalf’ refers to the individual that is authorised to act on behalf of an entity for a specific Simplified Due Diligence transaction. 

First AML will collect the following information as per Section 19 of the AML/CFT Act for a person acting on behalf of a customer. 

  1. The person’s full legal name(s);
  2. The person’s date of birth; 
  3. The person’s relationship to the customer; and 
  4. Any information as prescribed by regulations.

First AML will obtain reliable and independent evidence to confirm the person’s authority to act on behalf of the customer.

Being able to outsource our AML compliance requirements, means our staff are not bogged down making everyone happy.

Mike Kemps, Kemps Weir Lawyers

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Standard Due Diligence

Criteria

First AML will conduct Standard Due Diligence when neither Enhanced nor Simplified Due Diligence applies. 

Please see the full list of qualifying circumstances in the AML/CFT Act Section 14(1).

What do we collect?

First AML collects the following information to verify the customer and all beneficial owner(s) of the customer as per the AML/CFT Act Section 15.

  1. The person’s full legal name(s); 
  2. The person’s date of birth; 
  3. If the person is not the customer, the person’s relationship to the customer; 
  4. The person’s address or registered office; 
  5. The company identifier or registration number; and 
  6. Any information prescribed by regulations. 

 

As per the AML/CFT Act Section 5(1), a beneficial owner means any individual who:

  1. as effective control of a customer or person on whose behalf a transaction is conducted; or
  2. owns a prescribed threshold of the customer or person on whose behalf a transaction is conducted

 

Please note the prescribed threshold is more than 25% for the definition of beneficial owner under section 5(1) of the Act. Please refer to the AML/CFT (Definitions) Regulations 2011. 

What do we verify?

First AML will electronically verify the person’s name and date of birth against reliable and independent sources. First AML will default to manual verification if electronic verification is not possible. Please see Documental Certification Standards below.

First AML will confirm the existence of a nominee director, shareholders or shares in bearer form directly with the case contact. This confirmation will be collected via email reply, text or phone call. Please refer to the AML/CFT (Requirements and Compliance) Amendment Regulations 2021 sections 11 and 12 for further information. 

For overseas entities, First AML will seek to obtain copies of the relevant entity documents to confirm beneficial ownership of the entity.

Being able to outsource our AML compliance requirements, means our staff are not bogged down making everyone happy.

Mike Kemps, Kemps Weir Lawyers

First AML is a holistic service in terms of contacting clients getting identity information, then completing the PEP check and returning the verification report.

– Lisle Clements, Grant Thornton

Enhanced Due Diligence

Criteria

Enhanced Due Diligence is conducted whenever instructed by the Reporting Entity to do so (e.g. because the Customer is high risk), and whenever required by the AML/CFT Act, including when the customer person/entity is (but not limited to): 

  1. A trust or another vehicle holding personal assets
  2. A company with 1 or more nominee directors, or shareholders or shares in bearer form
  3. A limited partnership with nominee general partners
  4. A customer deemed by the Reporting Entity to be high risk e.g. customer has been determined to be a politically exposed person


Please see the full list of qualifying circumstances in the AML/CFT Act Section 22.

What do we collect?

In addition to the Standard Due Diligence verification, First AML may collect information to verify the source of funds/wealth of the customer. 

First AML will collect source of funds/wealth evidence in line with our source of funds/wealth guidelines that we send to the customer. 

First AML does not collect certified copies of Source of Wealth/Funds evidence.

Ongoing due diligence

There are two ways for a Reporting Entity to request Ongoing Customer Due Diligence (OCDD) cases. These cases must be a previously verified entity within the Reporting Entity’s own First AML database.

  1. “Re-verification required” – First AML will re-verify the entity to ensure the documentation is up to date and there has been no changes to the entity structure. These cases will be charged at 50% of your complex fee.
  2. “No verification required” – The case will immediately move to the ‘Ready to Review’ section in the Platform and will not be checked by Analysts. There is no charge for this type of case request. 

 

For individual cases, First AML will send out a new Electronic Verification Form (EIV Form) and will re-verify their details to ensure it is up to date. This will be charged at the standard individual fee.

Being able to outsource our AML compliance requirements, means our staff are not bogged down making everyone happy.

Mike Kemps, Kemps Weir Lawyers