Guidance on Discontinuance of Business Relationships for AML Reasons

In a welcome development, the Central Bank of Ireland (“CBI”) has clarified its expectations for financial and credit institutions when dealing with customers who fail to provide customer due diligence (“CDD”) documentation or information. This is an issue which can often present practical and legal challenges in practice so the CBI’s Bulletin should serve as a useful reference point and ensure a greater consistency of approach going forward.

Background

The obligations to discontinue a business relationship or to refuse to execute a service / transaction on behalf of a customer in circumstances where CDD standards are not met are set out at section 33(8) of the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 as amended (“CJA 2010”).

Financial and credit institutions may find themselves having to consider such obligations where they have permitted accounts to be opened for customers prior to receipt of full CDD documentation or where they are dealing with customers who were on-boarded prior to the introduction of anti-money laundering legislation.

 

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