Yesterday was my birthday, which always heralds a period of soul-searching and wrinkle-hunting. And as I filed away my passport, I glanced at the photo – in which I look rather like the Kray twins’ older and meaner sister – and it occurred to me that I have not yet addressed one of the most common questions I hear during AML training. It is all the fault of the legislation, which – whatever your jurisdiction – says something like “Ongoing monitoring includes keeping the documents, data or information obtained for the purpose of applying customer due diligence measures up-to-date”. It’s that pesky final phrase: up to date.
What staff often think this means is that the due diligence documents you hold on file must be current. So if you take on a client and three years later the passport of which you hold a certified copy expires, do you need to get a copy of the client’s new passport? I would say not. The legal requirement, as I read it, is that the due diligence information you hold on your client – and to which you refer in order to assess their money laundering risk – must represent the client as they are now. So, thinking about the passport: if the client still has the same name, and looks pretty much the same, and is of the same gender (stop sniggering at the back), then I would contend, m’lud, that the passport is still up to date. If, on the other hand, the client has married or divorced or changed their name to that of their favourite footballer or doomed chanteuse (I’m not making this up – take a look), or no longer looks anything like their photo, perhaps because they have had an extreme and life-changing operation, then the passport no longer represents your client and you should ask for the new one.
Of course, all such decisions are taken on a risk-based basis. So if your client is high risk, you might decide that one element of your EDD will be always to have his current passport on file. One benefit of this is that you can take the opportunity to leaf through it to see where he has been travelling… You don’t grow older without getting sneakier.
I hate money laundering 
Happy Birthday Susan!
Perhaps another tip: How many passports does your client have? http://taxhavenreport.wordpress.com/2012/07/20/official-the-passport-report-by-w-g-hill/
It seems my ex was mentioned in one of them many years ago (a client had noticed). I know one of his clients obtained a legal second passport from an African country (paid for it), next to the fraudulent one he obtained in the UK to kidnap his child. Even Gerard Dépardieu got a Russian passport because Vladimir Poutine liked him enough. Of course the typical white collar criminal will not advertise this with a smile in the newspaper. And will only declare the passport which is of most use to him at that moment.
Dear Claire
That is an excellent idea – about the number of passports. (Readers, Claire was once married to a money launderer; we think he is now “semi-retired”, whatever that means for a criminal!)
And that is a very scary link – thanks for sharing it with us.
Best wishes from Susan
20 years ago, you couldn’t google this. It was just by word of mouth. PT – The Perpetual Traveler was his first report (of no relation to the “Eternal Traveler” that I call myself!). The fact that he is still selling these reports (some 30 years after PT first was published) means that it is still very actual…
Hi Susan
A somewhat belated happy birthday from me too. I hope that, in amongst the soul-searching and wrinkle-hunting, you also had time to enjoy the day … perhaps enjoying an extra chocolate biscuit or two along the way !!
Best wishes
Graham
Hi Graham
It’s worrying how well you know me! And I had a lovely day, thank you, with plenty of chocolate in many forms!
Best wishes from Susan
I just have to come back to this subject after reading the bail conditions for Oscar Pistorius (as you can understand, I am interested in this South African tragedy). One of them is that he has to hand in all his passports and cannot travel. Actually, he is not allowed to leave Pretoria. His lawyers claims: “How would he be able to pass customs with those prosthesis legs? He has to explain every time.” Well, South Africa has borders with Namibia, Bostwana, Zimbabwe and Mozambique. And even easier: it has many many many kilometers of sea shores. An escape by would be easy. Has he really handed in all his passports? My ex had a Belgian passport that the South Africans never knew about, until I told them! (I wasn’t going to sign a paper where he claimed not to hold any other nationality). And another South African friend also has a European nationality, unbeknown to the South Africans. You are not allowed to have two nationalities, unless you are granted special permission (or have them by birth). Still, there is no way for the government services to find out, unless someone tells them.
Dear Claire
An excellent point – perhaps judges/magistrates should take care always to specify “all travel permits”. I know that naughty people will still withhold them, but at least it means they are deliberately disobeying a court order and have no wriggle room to say “But you only asked for my South African passport”.
And perhaps MLROs should also adopt this approach; maybe take-on forms for high-risk business could ask applicants to list all passports/identity documents, and not just one.
[For new readers who don’t know Claire, the ex that she mentions is a money launderer.]
Best wishes from Susan