Document ID: chunk:federal_register_of_legislation:F2024C01198:body:0:p55
Version: federal_register_of_legislation:F2024C01198
Segment Type: other
Provision Reference: 
Character Range: 153329–156438

of the first entity;

         (2) the first entity must determine:

            (a) the type and level of money laundering, financing of terrorism or other serious crime risks that the first entity may reasonably be expected to face in its provision of designated services; and

            (b) the nature, size, and complexity of the other person's business, including its products, services, delivery channels, and customer types; and

            (c) the level of money laundering, financing of terrorism or other serious crime risks in the country or countries in which the other person operates or resides;

         (3) the other person must be:

            (a)     a reporting entity; or

            (b)     a foreign entity regulated by one or more laws of a foreign country giving effect to the FATF Recommendations relating to customer due diligence and record-keeping (equivalent CDD and record-keeping obligations);

         (4) if the other person is a reporting entity, the other person must have measures in place to comply with their obligations under Parts 2 and 10 of the Act;

         (5) if the other person is a foreign entity, the other person must have measures in place to comply with the equivalent CDD and record-keeping obligations.

         Note:  Paragraph 37A(2)(d) and section 32 require the first entity to obtain the KYC information referred to in subparagraph 7.2.2(1)(b) from the other person before commencing to provide a designated service.

     Regular assessments of agreements or arrangements for reliance

     7.2.3 The first entity must carry out regular assessments of the requirements prescribed by paragraph 7.2.2 to ensure that the other person is continuing to meet those requirements.

     7.2.4 The assessments must be carried out by the first entity at regular intervals, having regard to:

         (1) the type and level of money laundering, financing of terrorism or other serious crime risks faced by the first entity; and

         (2) any material change in respect of a matter prescribed by subparagraphs 7.2.2(2)–(5);

     but in any event, at least every two years.

         Note:  If the assessment conducted under paragraph 7.2.3 identifies that the requirements are not being met, the first entity cannot rely on procedures carried out by the other person until the first entity believes on reasonable grounds that the requirements of paragraph 7.2.2 are being met.
          Part 7.3 Case-by-case reliance

     7.3.1  This Part is made for paragraph 38(e) of the Act.

     7.3.2 The first entity may rely on applicable customer identification procedures or other procedures (as prescribed by paragraph 7.1.2) carried out by the other person if:

         (1) the other person satisfies the requirements in subparagraphs 7.2.2(3)–(5); and

         (2) the other person has obtained all required KYC information relating to the identity of:

             1.           the customer; and

             2.           the beneficial owner of the customer (if any); and

             3.           a person acting on