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Enhanced CDD measures for politically-exposed persons

Moneylenders (Prevention of Money Laundering, Terrorism Financing and Proliferation Financing) Rules 2009

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—(1) A moneylender must, in addition to the obligations under these Rules, perform the measures referred to in paragraph (2) on a borrower, if the moneylender knows or has reasonable grounds to believe that —(a)the borrower or the borrower’s agent (if any) is a politically-exposed person; or(b)where the borrower is an entity or a legal arrangement, the borrower has a connected party or beneficial owner who is a politically-exposed person.(2) The measures referred to in paragraph (1) are —(a)documenting, during the course of the business relation or when undertaking a transaction with or for the borrower, each movement of funds in the account used for disbursing or repaying a loan, and assessing the likelihood of the account being used in connection with any of the following activities:(i)money laundering;(ii)terrorism financing;(iii)proliferation financing; and(b)establishing by appropriate and reasonable means the source of wealth and source of funds of the borrower or beneficial owner.(3) A moneylender who —(a)has identified any borrower or any agent, connected party or beneficial owner of a borrower to be a politically-exposed person; or(b)subsequently comes to know that any borrower or any agent, connected party or beneficial owner of a borrower is or was a politically-exposed person,must obtain a decision from the moneylender’s senior management on whether to establish or maintain the business relation with the borrower.(4) The moneylender must keep a written record of the moneylender’s findings and the basis of a decision under paragraph (3), and must produce these to a relevant law enforcement authority upon demand.(5) A moneylender may adopt a risk-based approach in the application of measures under this rule in relation to —(a)a domestic politically-exposed person; (b)a politically-exposed person of an international organisation; or(c)a politically-exposed person who has stepped down from a prominent public function, taking into consideration the level of influence the person continues to exercise after stepping down from that function.(6) Paragraph (5) does not apply if the moneylender knows or ought reasonably to know that the business relation or transaction in question presents a high risk of money laundering, terrorism financing or proliferation financing.(7) A moneylender who contravenes paragraph (1), (3) or (4) shall be guilty of an offence.(8) In this rule, each reference to a politically-exposed person includes a reference to a family member or close associate of the person.(9) In this rule, “family member”, in relation to a politically-exposed person, means a parent, a step-parent, a child, a stepchild, an adopted child, a spouse, a sibling, a stepsibling or an adopted sibling of the person.(10) In this rule, a person, (A), is a close associate of a politically-exposed person, (B), if —(a)A is a partner of B;(b)A is an employee or employer of B;(c)A is an officer of any corporation of which B is an officer;(d)A is an employee of an individual of whom B is an employee;(e)A is accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of B;(f)B is accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of A; (g)A is a person with whom B has an agreement or arrangement, whether oral or in writing and whether express or implied, to act together to apply for or obtain a loan from a moneylender; or(h)A is closely connected with B socially or professionally in any manner not specified in sub-paragraphs (a) to (g).

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