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    Client Due Diligence (AML Start to finish process)

    This article will guide you through the start to finish process of using the AML-CFT Workflow in Connectworks to perform Client Due Diligence and help meet your compliance obligations under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009.

    To enable Centrix SmartID checks there are authority forms which we require to be completed. If you would like this function switched on in your account please complete the forms available here and return them to support@connectworks.com.  

    1. Setting up the entity requiring CDD

    The AML Workflow can be used to perform Client Due Diligence (CDD) on companies, trusts and individuals. The first step is to ensure that the entity has been loaded and appears in your firm's Clients tab.

    If the trust, company or individual is not already set up, please refer to the articles below for further instructions.

    Setting up Companies

    Setting up Trusts

    Setting up Individuals

    *To conduct CDD on other entities such as Partnerships, Joint Ventures, Property Transactions or Estates please contact the Connectworks support team at support@connectworks.com.

    2. Adding identity evidence and making a determination

    Under the AML-CFT Act there are three key identity verification requirements:

    • Record identity information

    • Verify identity information

    • Verify the individual matches the identity information provided

    To perform identity verifications, you first need to upload identity information & evidence against the individuals involved.

    Although this information can be captured in a variety of places within Connectworks, the best place to enter the information is your firm's contacts list. To do this:

    1. Navigate to your firm's Clients>Contacts list.

    2. Within the search bar type the name of the contact you wish to record identity information against.


    Important

    If searching your contacts list shows multiple copies of the same person you must merge all duplicate contacts before proceeding with the next steps.


    3. When a single copy of the individual appears in your Client>Contacts list place a tick next to the contact, click on the edit button.

    4. Navigate to the Identity information tab of the Update contact form. Click the Start Adding Evidence button and then select the type of evidence you are recording. 

    After collecting a piece of evidence you may choose to continue adding further forms of identity information by selecting Add evidence.

    5. You can also use Centrix SmartID to verify the identity information you have provided.

    Centrix runs a search based on the information provided, across government, banking and other databases to verify that the details are accurate and up-to-date. Along with that, Centrix also does an international Politically Exposed Person (PEP) and Sanctions check using the Thompson Reuters Worldcheck database. 

    In addition to the annual client subscription, the Centrix SmartID checks are charged per check, at a cost of:

    SmartID with Driver Licence             $5.00

    SmartID with Passport                      $6.00

    *Prices exclude GST
    **ID checks on non-New Zealand nationals are not yet available.

    6. Once you are satisfied with the evidence collected you can make a final determination that the individual's identity has been verified. To do this simply select Make a determination. Then using the identity evidence collected complete the name, date of birth and address fields below. The fields will pre-populate based on the evidence collected. If you are satisfied the identity information showing is correct select Confirm Identity.

    3. The AML Compliance Tab

    Once the individual's identity information has been uploaded and a determination has been made, navigate to your firm's Work>AML Compliance tab. 

    Initially, every entity your firm manages will appear in the ‘Undergoing CDD’ subsection on the ‘AML Compliance’ tab.

    After completing the AML workflow the entity will be moved to the ‘Completed CDD’ tab.

    You can apply filters to the workflow in the left-hand column, to view the clients' list by:

    • Date scheduled to be completed

    • Review status

    • Level of CDD

    • Level of risk

    • Client type

    • Business unit

    • Partner

    • Manager

    4. Begin Performing CDD on an entity

    CDD Workflow Steps

    Begin CDD

    Within the ‘Undergoing CDD’ page of the AML Compliance tabsearch for, then click on the name of the entity you would like to perform a CDD check on. A slide-out form will appear which provides the information you need to capture, based on the legislation and DIA guidelines.

    5. CDD Workflow Step 1: Level of CDD

    1. If desired, schedule a due date for completion of CDD. 

    2. Under the Nature of business relationship select all applicable options for this entity.

    At the bottom of this page, you also have the option to enter additional notes and attach any supporting documents, such as an internal checklist or terms of engagement which the client has agreed to.

    3. The last step on this page is to select the Level of CDD to perform. Based on the outcome of your risk assessment you can select from Simplified, Standard or Enhanced CDD. 

    Note - Trusts will always require Enhanced CDD so this option will be selected by default.

    4. Once you have filled out all the details on this page, click Update on the top right corner.

    6. CDD Workflow Step 2: Client Information

    1. Navigate to the "Client Information" subsection in the left-hand column. Most fields in this subsection will already be filled via the information provided from the Companies Office, or previously recorded within the entity's profile.

    There is a legal requirement to enter a companies trading name if it differs from the legal entity name.

    2. Once you have checked all the information is correct and made any amendments, select the tick box at the bottom of the page "This section has been completed"

    3. Select Update

    7. CDD Workflow Step 3: CDD Candidates

    1. Navigate to the "CDD Candidates" subsection in the left-hand column. A list of the parties associated with the client will appear here. 

    2. Next, to the names of the people/entities you would like to include in the entity's CDD, select the AML- relevant relationship.

    Relationships that can be selected are:

    • Effective control; Authority to act
    • Transactions conducted on behalf
    • >25% ownership (companies only)
    • Other

    Where the client is an individual subscription, the individual is automatically selected as a CDD Candidate (flagged as ‘Client’) and cannot be removed. Additionally, more than one relationship can be selected per candidate.

    NB. If there are candidates missing from the list of CDD candidates, you will have to navigate back to the entities workspace to add in the required individuals

    Be aware that for companies, unless you have manually updated the share register held in Connectworks it will only display the share register as it was recorded with the Companies Office on the day of import. If the share register is up to date and you have identified parties with effective control/beneficial ownership then these individuals will pre-populate as requiring CDD.

    Important 
    If more than one copy of an individual appears in the list return to your Clients>Contacts tab, search for the person and Merge Duplicate Contacts before proceeding with the next step.


    3. As you add candidates they will form a list which displays their roles within the entity and the reason for performing CDD.

    4. When you are satisfied that the correct people appear in this list, with the correct roles showing beneath their names select the tick box "This section has been completed".

    5. Select Update

    Note: As you progress through the steps you will notice that ticks begin to accumulate next to each section. This will only occur when it has been marked as complete. If you want to come back to complete a section later simply update in the top right without selecting "This section has been completed". The section will remain un-ticked until updated.
     

    Related Article:

    If one of your CDD candidates is another entity (ie. a Company, Trust, Partnership or other) you may wish to also review our article Completing CDD across complicated ownership structures.

    8. CDD Workflow Step 4: Perform CDD

    1. Navigate to the "Perform CDD" subsection in the left-hand column. A list of the CDD candidates will appear displaying the ID verification information that was added against the individuals in the first step Adding evidence and making a determination, their AML/CFT relationships to the entity and source of funds.

    • Identity verification - collect and verify name D.O.B. and address of candidate (Name, NZBN and registered address for non-natural candidates)
    • AML/CFT relationships - Record and provide evidence of Beneficial ownership and confirm the authority to act on behalf of the client.
    • PEP and Source of funds - Determine whether the candidate is politically exposed and provide evidence of the source of funds for the candidate if required. (PEP is non-applicable for a non-natural entity)

    Select ‘Update’ next to each of the above-mentioned sections to add information (or “collect and verify” for the identity verification section)

    2. If the evidence from a prior determination displaying is correct you can select "Use this".

    3. If a person's information needs updating, or a person does not have an ID determination appearing, select "Collect & Verify" to make a new determination. You can also update the "PEP and source of funds".

    4. Click update once this section has been completed.


    Related Article:

    If one of your CDD candidates is another entity (ie. a Company, Trust, Partnership or other) you may wish to also review our article Completing CDD across complicated ownership structures.

    9. CDD Workflow Step 5: Source of Funds

    Once the ‘Perform CDD’ section has been completed and you can now move onto the ‘Source of funds’ section of the CDD form.

    You can enter information and attach documents such as tax returns or sale & purchase agreements.

    Click update once this section has been completed.

    10. CDD Workflow Step 6: Risk Assessment

    The ‘Risk assessment’ section contains a list of what is considered to be risky activities by the Department of Internal Affairs.

    1. Select all activities which apply for this entity, or add your own notes in the "other" field.

    2. Under the checklist, there is a risk exposure dropdown. Having determined the areas of risk, assign an overall risk rating for this client.

    3. At the very bottom, there is a ‘Final determination’ section, here you can select ‘Proceed with client’ which will put the CDD into the "first review" workflow stage, ready to be assessed by your firms' AML Compliance Officer.

    11. CDD Workflow: First Review & Second Review

    AML Workflow Status: First Review 

    The First Review step in the workflow provides the opportunity for a client manager, firm manager or Partner to review and approve that the information that has been captured up until this point. 

    When the entity has been progressed to First Review there should be an internal process at your firm to advise the person responsible for this step to log in and check these clients by following the steps outlined below:

    1. In the firm workspace navigate to the Work>AML Compliance>Undergoing CDD tabs.

    2. In the left column apply the ‘First review’ filter.

    3. Click on the name of any company in the first review stage to automatically open the ‘Review & confirm’ section which displays a summary of all the information. 

    4. If you are satisfied with the summary then simply select the tick box "I have reviewed and confirmed CDD on this client" and then select Submit confirmation.

    NB. If more information is required the reviewing manager can navigate back to the appropriate section of the workflow and add or amend the information, then proceed with the confirmation.

    AML Workflow Status: Second Review 

    The second review is for your AML Compliance Officer to make a final confirmation that the CDD has been completed.

    Just like the first review, your firm should have an internal process to advise the AML Compliance Officer when there are entities to be checked. 

    When making the second review you can also schedule a specific date for re-running CDD on the client. If not updated, the system will default to requiring a CDD check again in 2 years.

    Once the second review has been completed, the entity will then moved into the Completed CDD tab (at the top) and the entity's next scheduled review date is displayed next to it.

    If for any reason you need to update CDD on a client in the Completed CDD tab you can do this by selecting the tick box by the entity name, then using the "..." drop-down menu select "CDD needs updating", then return to the undergoing CDD tab and update as required.


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