HISTORIA DEL ABUELO TRUENO

7(3)(b) 5.4.1 Although the Regulations refer to simplified due diligence meaning _{not having to apply CDD measures, this is subject to the risk in the} relationship being assessed as appropriately low. Firms must have reasonable grounds for believing that the customer, transaction or product relating to such transaction falls within one of the categories set out in the Regulations, and may have to demonstrate this to their supervisory authority. In practice, simplified due diligence means not having to verify the customer’s identity, or, where relevant, that of a beneficial owner, nor having to obtain information on the purpose or intended nature of the business relationship. It is, however, still necessary to conduct ongoing monitoring of the business relationship. Clearly, for operating purposes, the firm will nevertheless need to maintain a base of information about the customer.

Regulation 13 _{5.4.2 Simplified due diligence may be applied to::}

(i) certain other regulated firms in the financial sector (see paragraph 5.3.113)

(ii) companies listed on a regulated market (see paragraph 5.3.133) (iii)beneficial owners of pooled accounts held by notaries or

independent legal professionals (see paragraph 5.3.121) (iv)UK public authorities (see paragraph 5.3.171)

(v) Community institutions (see paragraph 5.3.172)

(vi)certain life assurance and e-money products (see Part II, sectors 7 and 3)

(vii) certain pension funds (see paragraphs 5.4.4 and 5.3.208ff) (viii) certain low risk products (see paragraph 5.4.5)

(ix) Child Trust Funds and Junior ISAs (see paragraphs 5.4.6 - 5.4.8)

Regulation 7(1) (c) _{5.4.3 There is no exemption from the obligation to verify identity where the} firm knows or suspects that a proposed relationship or occasional transaction involves money laundering or terrorist financing, or where there are doubts about the veracity or accuracy of documents, data or information previously obtained for the purposes of customer verification.

Regulation 13(7)(c) _{5.4.4 Simplified due diligence may be applied to pension, superannuation or} similar schemes which provide retirement benefits to employees, where contributions are made by an employer or by way of deduction from an employee’s wages and the scheme rules do not permit the assignment of a member’s interest under the scheme.

Regulation13(8) and Schedule 2,paragraph 3

5.4.5 Simplified due diligence may be applied to low risk products which meet specified criteria set out in the ML Regulations. These criteria, which are cumulative, are:

(i) the product has a written contractual base;

(ii) any related transactions are carried out through an account of the customer with a bank which is subject to the money laundering directive, or a bank in an equivalent jurisdiction; (iii)the product or related transaction is not anonymous and its

nature is such that it allows for the timely application of CDD measures where there is a suspicion of money laundering or terrorist financing;

(iv) the product is within the following maximum threshold: a. in the case of insurance policies or savings products of

a similar nature, the annual premium is no more than €1,000 or there is a single premium of no more than €2,500;

b. in the case of products which are related to the financing of physical assets where the legal and beneficial title of the assets is not transferred to the customer until the termination of the contractual relationship (whether the transaction is carried out in a single operation or in several operations which appear to be linked) the annual payments do not exceed €15,000;

c. in all other cases, the maximum threshold is €15,000. (v) the benefits of the product or related transaction cannot be

realised for the benefit of third parties, except in the case of death, disablement, survival to a predetermined advanced age, or similar events;

(vi) in the case of products or related transactions allowing for the investment of funds in financial assets or claims, including

insurance or other kinds of contingent claims:

a. the benefits of the product or related transaction are only realisable in the long term;

b. the product or related transaction cannot be used as collateral;

c. during the contractual relationship, no accelerated payments are made, surrender clauses used or early termination takes place.

Regulation 13(8), (9),

(10) 5.4.6 Firms need to decide whether particular products meet the criteria for _{simplified due diligence. In respect of Child Trust Funds and Junior} ISAs, no CDD measures need be carried out. Other products in respect of which no CDD measures need be carried out may be designated from time to time by HM Treasury, by amendment of the ML Regulations.

5.4.7 In respect of Junior ISAs, simplified due diligence may be applied. Firms will, however, in due course need to verify identity at the point the child reaches 18 years and becomes entitled to the funds, or at the next ‘trigger’ event thereafter (unless the child’s identity has by then already been verified for the purposes of some other relationship). 5.4.8 With Junior ISAs, the child is able to manage the account from the age

of 16, in which case the firm might choose to undertake customer due diligence at that stage in order to avoid delaying any transaction the child should wish to undertake on reaching 18, when the account becomes a ‘full’ ISA. It is recommended that firms indicate in their product literature etc. what their policy will be when, for example, the child reaches 16 or 18.

Regulations 5 and 8 POCA s330 (2)(b) Terrorism Act s 21A

5.4.9 An exemption from the basic verification obligation does not extend to the obligation to conduct ongoing monitoring of the business relationship, or to the duty to report knowledge or suspicion of money laundering or terrorist financing.