Enhanced due diligence

The MLRs call for enhanced due diligence in a number of circumstances. These would usually be flagged to you on a case by case basis by the MLRO. The following are the most notable reasons for enhanced CDD:

1. Where the client is a Politically Exposed Person ("PEP") or the close associate of one. A PEP is anyone who has held a high-ranking position in a government or organisation in the last 12 months (including those who still hold the same), and those closely related to them personally or in business. We have chosen not to apply the definition to local government, more junior members of the senior civil service or anyone other than the most senior military officials (Our systems will pick this up when we run the check, although if you know that a client is a PEP, then you should make this clear during the client set-up process to save time. You may wish to call and discuss this with the MLRO in advance of setting up the client).
2. Where you assess the client and/or matter as representing a high-risk, as per the Risk Questionnaire algorithm, and this assessment is confirmed by the MLRO.
3. Where the matter is linked to a high-risk sector or high-risk jurisdiction. Any linkage counts, whether through the client, the other parties involved, the subject matter or the funds flow.
4. Where the client is an individual and no Keystone lawyer or trusted third party has met them face to face and this is out of the ordinary.

Risk profiles can change. It might change during the matter and if so, you should let the MLRO or Clients Team know. However, it might change during the CDD process. You might discover that your client has a PEP within its structure, for example, or that funds will come from a high-risk jurisdiction. If enhanced due diligence is required, then the Clients Team will take most, if not all, of the following extra steps (this is at the discretion of the MLRO).