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KYC/AML requirements/process, first large client

Best practice for KYC/AML on boarding

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I'm an ICAEW CA with a consulting business, to date clients have been local and small, referred through local networks, ex colleagues etc and due to the nature of my engagements I don't have a large volume of clients.  Therefore to date KYC/AML has been relatively easy, straightforward and manual...taking copies of originals documents of Directors...passports, utility/council tax bills etc......check Companies House.....use the ICAEW free check service.  I have a simple tick box risk profile form I created myself and store the documents securely online.

I've been approached by an ex colleague to help lighten the load at a busy time of year at her company and do a few days for her.  This is great however the organisation is much larger than any previous clients.  There are 5 directors, not all in the UK and some are high profile individuals.  Therefore my normal AML/KYC process is a bit too basic.  What should I do?  What would be sufficient?

I've looked at services like Veriphy which work on a pay-as-you-go basis, would their £4 ID check for each director be sufficient.

The company is audited by KPMG, can I place any reliance on that?

Thanks, my question feels a bit perocial but I find the ICAEW guidance baffling at times!

Replies (7)

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By Kaylee100
13th Jan 2021 22:15

Mercia offer a really good set of systems. Worth checking out.

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By Matrix
13th Jan 2021 23:16

What do you get free from the ICAEW?

I don’t have big clients but I id beneficial owners and not Directors.

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By paul.benny
14th Jan 2021 08:10

Although you don't set out the exact work you are doing, it sounds like you are acting as a contractor rather than this being a client for your firm in the more usual manner

On that basis, I don't think you need to do anything over and above your normal processes. That said, I would still document your reasoning and agree a statement of work. You might also want to expressly exclude certain work in your SoW.

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David Winch
By David Winch
14th Jan 2021 08:33

In terms of "reliance", you cannot simply assume someone else (KPMG in this case) must have done client due diligence. There has to be an agreement. See Reg 39 at
https://www.legislation.gov.uk/uksi/2017/692/regulation/39/made
David

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By ireallyshouldknowthisbut
14th Jan 2021 08:55

if this is all new for you, then speak to the ICAEW. They are really helpful for things like this.

Things like the Veriphy services are quite frankly a key part of any ID checks, no matter how small and local the client. Everyone is "local" to somewhere.

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By David Gordon FCCA
19th Jan 2021 12:25

Work backwards
1)
The company is audited by KPMG. It is therefore for KPMG through its audit procedures to satisfy itself that its client's Know Your Client procedures are acceptable.
2)
Either you are subcontracting or you are principal and client. You cannot be both at the same time.
If you are s/c it is for you to have a written agreement with the contractor which sets out that the contractor is professionally responsible for compliance (Including paying you appropriate fees). Exactly as if you were an employee.
I s/c some tax stuff for a colleague. I have provided a letter of engagement to his practice which hopefully covers this point.
It is for the principal company to hold appropriate Know Your Client stuff for its clients, not you.
You have a professional duty of care, but that is not quite the same thing.

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