Practices and Recommendations aimed at reducing the risk of ... - Alfi
Practices and Recommendations aimed at reducing the risk of ... - Alfi
Practices and Recommendations aimed at reducing the risk of ... - Alfi
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guidelines<br />
<strong>Practices</strong> <strong>and</strong> <strong>Recommend<strong>at</strong>ions</strong><br />
<strong>aimed</strong> <strong>at</strong> <strong>reducing</strong> <strong>the</strong> <strong>risk</strong> <strong>of</strong><br />
money laundering <strong>and</strong> terrorist<br />
financing in <strong>the</strong> Luxembourg<br />
Fund Industry<br />
in associ<strong>at</strong>ion with 1
www.cssf.lu<br />
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Intermediary<br />
Investor<br />
Screening against sanction <strong>and</strong> PEP lists<br />
Drives level <strong>of</strong><br />
KYC <strong>and</strong> sets<br />
level for<br />
transaction<br />
monitoring<br />
Risk Assessment:<br />
Composite <strong>of</strong>:<br />
• Type <strong>of</strong> person/entity<br />
• Type <strong>and</strong> n<strong>at</strong>ure <strong>of</strong><br />
business<br />
• Jurisdiction/supervision<br />
• Ownership <strong>and</strong><br />
management structure<br />
• Customer base<br />
• Reput<strong>at</strong>ion<br />
• AML <strong>and</strong> CTF<br />
policies/procedures<br />
• AML<br />
investig<strong>at</strong>ions/sanctions<br />
• Type, purpose, <strong>and</strong><br />
anticip<strong>at</strong>ed activity<br />
• Distribution channel<br />
• Transactions<br />
Risk Assessment:<br />
Composite <strong>of</strong>:<br />
• Type <strong>of</strong><br />
person/entity<br />
• Jurisdiction<br />
• Type <strong>of</strong> business<br />
• Ownership &<br />
management<br />
structure<br />
• Type, purpose, <strong>and</strong><br />
anticip<strong>at</strong>ed activity<br />
• PEP<br />
• Source <strong>of</strong><br />
funds/wealth<br />
• Distribution channel<br />
• Transactions<br />
Low Risk Medium High<br />
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Minimum Due Diligence Oblig<strong>at</strong>ions<br />
EEA/EU/Equivalent<br />
Intermediary<br />
Adapt<strong>at</strong>ion <strong>of</strong> <strong>the</strong> extent <strong>of</strong> normal due diligence measures on a <strong>risk</strong>sensitive<br />
basis on <strong>the</strong> Intermediary.<br />
AND<br />
Enhanced due diligence measures on <strong>the</strong> Correspondent Rel<strong>at</strong>ionship.<br />
RIN Intermediary<br />
Normal due diligence on <strong>the</strong> Intermediary.<br />
AND<br />
Enhanced due diligence measures on <strong>the</strong> Correspondent Rel<strong>at</strong>ionship with<br />
written document<strong>at</strong>ion <strong>of</strong> <strong>the</strong> AML/CTF responsibilities <strong>of</strong> <strong>the</strong><br />
Intermediary.<br />
Intermediary in<br />
jurisdiction with str<strong>at</strong>egic<br />
AML/CTF deficiencies<br />
(C<strong>at</strong>egories 3 <strong>and</strong> 4 in<br />
section V.E.)<br />
nhanced due diligence on <strong>the</strong> Intermediary (including certific<strong>at</strong>ion <strong>of</strong><br />
relevant identific<strong>at</strong>ion documents <strong>of</strong> <strong>the</strong> Intermediary).<br />
AND<br />
Enhanced due diligence measures on <strong>the</strong> Correspondent Rel<strong>at</strong>ionship with<br />
detailed written document<strong>at</strong>ion <strong>of</strong> <strong>the</strong> AML/CTF responsibilities <strong>of</strong> <strong>the</strong><br />
Intermediary.<br />
AND<br />
Intermediary’s written commitment to provide relevant Customer due<br />
diligence d<strong>at</strong>a to <strong>the</strong> UCI/Pr<strong>of</strong>essional upon request.<br />
Intermediary in<br />
jurisdiction subject to a<br />
FATF call on its members<br />
<strong>and</strong> o<strong>the</strong>r jurisdictions to<br />
apply counter-measures<br />
to protect <strong>the</strong><br />
intern<strong>at</strong>ional financial<br />
system from <strong>the</strong> on-going<br />
<strong>and</strong> substantial money<br />
laundering <strong>and</strong> terrorist<br />
financing <strong>risk</strong>s eman<strong>at</strong>ing<br />
from <strong>the</strong> jurisdictions<br />
(C<strong>at</strong>egory 5 in section<br />
V.E.)<br />
As part <strong>of</strong> <strong>the</strong> counter-measures to protect <strong>the</strong> financial system from <strong>the</strong><br />
on-going <strong>and</strong> substantial money laundering <strong>and</strong> terrorist financing <strong>risk</strong>s,<br />
no Correspondent Account will be opened. The UCI/Pr<strong>of</strong>essional is<br />
responsible for <strong>the</strong> due diligence on <strong>the</strong> underlying Investor <strong>of</strong> <strong>the</strong><br />
Intermediary, as defined in <strong>the</strong> Regul<strong>at</strong>ion.<br />
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© ALFI July 2013. All rights reserved.<br />
The practices <strong>and</strong> recommend<strong>at</strong>ions outlined in this document are adopted by <strong>the</strong><br />
Associ<strong>at</strong>ion <strong>of</strong> <strong>the</strong> Luxembourg Fund Industry (ALFI), <strong>the</strong> Luxembourg Bankers’<br />
Associ<strong>at</strong>ion (ABBL), <strong>the</strong> Associ<strong>at</strong>ion <strong>of</strong> Luxembourg Compliance Officers (ALCO) <strong>and</strong> <strong>the</strong><br />
Associ<strong>at</strong>ion <strong>of</strong> Pr<strong>of</strong>essionals in Risk Management, Luxembourg (ALRiM).<br />
<strong>Practices</strong> <strong>and</strong> <strong>Recommend<strong>at</strong>ions</strong><br />
<strong>aimed</strong> <strong>at</strong> <strong>reducing</strong> <strong>the</strong> <strong>risk</strong> <strong>of</strong> money laundering <strong>and</strong><br />
terrorist financing in <strong>the</strong> Luxembourg Fund Industry<br />
guidelines<br />
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