Factors indicating that enhanced scrutiny may be required

The following circumstances may result in a matter being assessed as high risk, and therefore require EDD, or may otherwise justify additional or enhanced measures under the Firm's risk-based approach:

• the client, matter, source of funds, source of wealth, or other relevant party has links to a jurisdiction presenting heightened money laundering, terrorist financing, corruption, sanctions, proliferation financing, or other financial crime risk, even where the automatic high-risk third country provisions do not apply;
• ownership, control structures, funding arrangements, or the involvement of third parties are unusually complex, opaque, or difficult to understand;
• the client has not been met and the identity, authority, or relationship of the instructing individual cannot readily be verified through standard measures;
• sanctions, proliferation financing, corruption, tax evasion, fraud, or other financial crime risks or indicators have been identified;
• the transaction, source of funds, or funding arrangements are unusual for the client, inconsistent with the Firm's understanding of the client or matter, or lack a readily understandable commercial or economic rationale;
• information obtained about the client, beneficial owner, source of funds, source of wealth, or purpose of the matter is inconsistent, incomplete, or gives rise to concern; or
• the MLRO otherwise determines that additional or enhanced measures are required.

These factors are not exhaustive and do not, of themselves, necessarily mean that the statutory EDD threshold has been met. The measures selected must respond to the particular risks identified. Applying generic additional checks that do not address those risks will not, by itself, amount to adequate EDD.

Keystone may apply enhanced scrutiny as a risk-appetite or control decision even where the MLRs do not mandate EDD. They must be considered in the context of the client, matter, and transaction as a whole. Where the Firm determines that the money laundering or terrorist financing risk is high, EDD and enhanced ongoing monitoring must be applied.

No work may commence on a matter requiring EDD until the additional measures identified as necessary have been completed and the required approval has been obtained. Any exception must be approved expressly by the MLRO, documented on file and subject to any conditions imposed, including that source-of-funds checks must be completed before funds are received or a transaction completes.