"Know your customer" - is it always required?

"Know your customer" - is it required regardless of business size and service type etc?

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I'm struggling to find anything definitive around KYC to establish whether it applies to all customer relationships. References I've found talk a lot about financial services and an extension to include estate agents in 2012 but don't make it clear if it is required for other services (or goods). I can see that it would be good practice in any setting but need to know if it is an actual requirement.

We do not undertake any independent KYC checks but our business was established well before POCA came into existence so I'm concerned that we've overlooked legislative changes and may have been non-compliant for some time. I'd be surprised if that's the case but I can't just assume it doesn't apply!

If it's not a requirement in all cases, I'd be interested in views as to whether businesses should 'opt in' and carry out KYC checks anyway.

Many thanks for any responses.

Replies (3)

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By Wanderer
30th Nov 2017 19:23

Never had to go through KYC when buying anything from Sainsbury's.

Generally required for certain types of business or those dealing in high cash transactions.

What sort of business are you in?

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By michaelblake
30th Nov 2017 21:12

The types of businesses that need to be compliant with MLR 2017 are listed here https://www.gov.uk/guidance/money-laundering-regulations-who-needs-to-re... and the policies and procedures that you need to have in place are here https://www.gov.uk/guidance/money-laundering-regulations-risk-assessments the CCAB guidance for accountants and tax advisers can be found by following the link for the Accountancy Sector on the last document. HMRC's expectation is that you will have on file a very detailed (24 point) risk assessment of every client even if you are only completing SA returns for only a dozen clients and most of them are pensioners.

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David Winch
By David Winch
30th Nov 2017 21:27

Only a business engaged in an activity in the 'regulated sector' (referred to in the regulations as a 'relevant person', which might be a self-employed individual, partnership, limited company, etc) is required to comply with the 'Know Your Client' or 'Customer Due Diligence' requirements of MLR 2017. See Regs 8 - 15 at
http://www.legislation.gov.uk/uksi/2017/692/made
Of course every individual & business is obliged not to commit any of the principal money laundering offences in sections 327 - 9 PoCA 2002. This is not limited to 'relevant persons'.
Similarly every person in any employment is obliged to report suspicions of terrorist property offences. Every individual & business is obliged not to commit terrorist property offences itself.
David

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