Due diligence and accepting funds – Regs 27-30 and Reg 32 for Enhanced Due Diligence

IPA Insolvency Practitioner newsletter AML Digest, December 2023

This is an important reminder to members that the IPA will expect to see on cases subject to review as part of any inspection or compliance review that due diligence work has been carried out on cases in accordance with the Regulations. No funds should be accepted prior to effective due diligence being completed. Therefore, it is crucial that bank details are not provided to new clients until due diligence has been completed. The risks of dealing with proceeds of crime are minimised if account details are only provided once the due diligence process is complete.

As per the CCAB Guidance, the due diligence should be carried out prior to the establishment of a business relationship. Even where there is a hostile or emergency appointment, an initial assessment of the risks should still be undertaken and the due diligence completed within five working days. Please see F.3 of the Guidance.