How should I file customer due diligence papers?
I am my firm’s money laundering reporting officer. Should we keep our customer due diligence (CDD) papers separate from the client’s main file?
It is not mandatory to hold CDD material separately from the client file for each retainer.
However, you should consider doing so as it may be needed by different practice groups in your firm, cross-referencing the main file appropriately.
Depending on the size and sophistication of your firm's record storage procedures, you may wish to:
- scan the verification material and hold it electronically
- take photocopies of the CDD material and hold it in hard copy with a statement that the original has been seen
- accept certified copies of CDD material and hold them in hard copy
- keep electronic copies or hard copies of the results of any electronic verification checks
- record reference details of the CDD material seen
Any records of suspicions and disclosures should be kept on a separate file to ensure that they are not inappropriately disclosed to the client or third parties in order to avoid committing the offences of tipping off and prejudicing an investigation.
For more information, see chapter 10 of the anti-money laundering guidance for the legal sector.
While every effort has been made to ensure the accuracy of the information in this article, it does not constitute legal advice and cannot be relied upon as such. The Law Society does not accept any responsibility for liabilities arising as a result of reliance upon the information given.
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