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anything like their photo, perhaps because they have had an extreme and life-changing operation, then the passport no longer represents your client and you should ask for the new one.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.