Document ID: chunk:federal_register_of_legislation:F2024C01198:body:0:p73
Version: federal_register_of_legislation:F2024C01198
Segment Type: other
Provision Reference: 
Character Range: 202645–205920

these Rules.

     15.8 A reporting entity must include an enhanced customer due diligence program in Part A of its AML/CTF program.

     15.9 Subject to paragraph 4.4.18, the reporting entity must apply the enhanced customer due diligence program when:

         (1)              it determines under its risk‑based systems and controls that the ML/TF risk is high; or

    Note: Reporting entities should consider whether any beneficial owner of a customer, including domestic or international organisation politically exposed persons, should be considered high risk.

         (2) a designated service is being provided to a customer who is or who has a beneficial owner who is, a foreign politically exposed person; or

         (3) a suspicion has arisen for the purposes of section 41 of the AML/CTF Act; or

         (4) the reporting entity is entering into or proposing to enter into a transaction and a party to the transaction is physically present in, or is a corporation incorporated in, a prescribed foreign country.

     15.10 The enhanced customer due diligence program must include appropriate risk-based systems and controls so that, in cases where one or more of the circumstances in paragraph 15.9 arises, a reporting entity must undertake measures appropriate to those circumstances, including a range of the measures in subparagraphs 15.10(1) to (7):

         (1) seek information from the customer or from third party sources in order to undertake one or more of the following as specified in subparagraphs 15.10(1)(a) – (d):

             (a) clarify or update KYC information already collected from the customer;

             (b) subject to paragraph 4.4.18, clarify or update beneficial owner information already collected from the customer;

             (c) subject to paragraph 4.4.18, obtain any further KYC information or beneficial owner information, including, where appropriate, taking reasonable measures to identify:

                 (i) the source of the customer's and each beneficial owner's wealth; and

                 (ii) the source of the customer's and each beneficial owner's funds;

              (d) clarify the nature of the customer's ongoing business with the reporting entity;

         (2) undertake more detailed analysis of the customer's KYC information and, subject to paragraph 4.4.18, beneficial owner information, including, where appropriate, taking reasonable measures to identify:

              (a) the source of the customer's and each beneficial owner's wealth; and

              (b) the source of the customer's and each beneficial owner's funds;

         (3) verify or re-verify KYC information in accordance with the customer identification program;

         (4) subject to paragraph 4.4.18, verify or re-verify beneficial owner information in accordance with the beneficial owner identification requirements specified in Chapter 4 of these Rules;

         (5) undertake more detailed analysis and monitoring of the customer's transactions – both past and future, including, but not limited to:

              (a) the purpose, reasons for, or nature of specific transactions; or

              (b) the expected nature and level of transaction behaviour, including future transactions;