15 Amendment of regulation 29 (additional customer due diligence measures: credit institutions and financial institutions)

In regulation 29, after paragraph (9), insert—

(10) Paragraphs (11) to (18) apply if the relevant person provides a customer with a new account into which monies are pooled (“pooled account”) on or after the day on which this paragraph comes into force.

(11) When providing a customer with a pooled account, the relevant person must—

(a) take reasonable measures to understand the purpose of the pooled account and how the customer proposes to use it;

(b) take steps to be satisfied that the purpose and proposed use under sub-paragraph (a) is consistent with the relevant person’s knowledge of the customer, the customer’s business and risk profile, and must conduct updated customer due diligence measures where it is not so satisfied; and

(c) once satisfied under sub-paragraph (b), assess the level of risk of money laundering and terrorist financing associated with the customer using the pooled account and take reasonable steps to manage and mitigate the risks arising from that use by the customer.

(12) In making an assessment under paragraph (11)(c), the relevant person must consider, among other things, the appropriateness of imposing controls on the pooled account to manage and mitigate the risks.

(13) The relevant person must be able to demonstrate to its supervisory authority that the extent of the measures it has taken to satisfy the requirements under paragraphs (11) and (12) is appropriate in view of the risks of money laundering and terrorist financing.

(14) When a customer has a pooled account with a relevant person, the customer must make available to the relevant person, on request from the relevant person, information on the identity of the persons on whose behalf monies are held in the pooled account and information on the identity of any beneficial owners of those persons.

(15) A customer which is provided with a pooled account by a relevant person must maintain accurate and up-to-date records in writing of all the monies that are paid into and out of the pooled account for a period of five years beginning, in the case of each payment into or out of the account, on the date on which the customer knows, or has reasonable grounds to believe, that the payment is complete.

(16) A customer of the relevant person must on request by any law enforcement authority provide information about itself and the management and use of any pooled account it has with the relevant person to that law enforcement authority.

(17) A customer is not required under paragraph (13), (14) or (16) to provide information which that person would be entitled to refuse to provide on grounds of legal professional privilege in proceedings in the High Court (or, in Scotland, on the ground of confidentiality of communications in the Court of Session).

(18) A disclosure made under paragraph (13), (14) or (16) is not to be taken to breach a duty of confidentiality owed by a professional legal adviser to a client of the adviser or any other restriction, however imposed, on the disclosure of information.

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