A common question is which client record the Customer Due Diligence (CDD) case belongs on, especially when you're setting up a new company or trust that doesn't exist yet. This article covers the common situations and how to handle each in OnboardMe.
Important: This article explains how OnboardMe is designed to be used. It isn't legal advice. Your AML program decides who your customers are and what you must do for each of them. Check your regulator's or supervisor's guidance and confirm your approach with your AML compliance officer.
Why it matters
CDD is done on your customer. Getting the customer right means the right people are identified, verified and risk assessed.
Each customer gets their own risk rating. One case per customer keeps each person's risk assessment and sign-off separate.
ID checks only need doing once. Linking people to their client records means their verification carries across cases.
The short version
Situation | Create the case on | Add as participants |
|---|---|---|
Work for an individual or sole trader | The individual | Any representative acting for them |
Work for an existing company, partnership or association | The company | Beneficial owners, controllers (directors) and representatives |
Work for an existing trust | The trust | Trustees, settlor, appointor, beneficial owners and representatives |
Setting up a new company or trust | Each individual asking you to set it up | Anyone else who will own or control the new structure |
Two or more people engaging you together | Each person, one case each |
Existing companies and trusts
When the company or trust already exists and you're providing it with a designated service, the company or trust is your client.
Create the case on the company or trust. OnboardMe picks the right checklist from the client type.
In C. Ownership and control, add the beneficial owners and controllers.
In D2. Client representative, add the people authorised to act for it.
Verify each person's identity and record their sanctions and PEP screening.
For a trust with a company as trustee, add the trustee company's directors as controllers.
See Beneficial owners, controllers and representatives.
Setting up a new company or trust
When clients ask you to set up a company or trust, the new entity doesn't exist yet, and CDD needs to be done before you set it up. So the company or trust can't be your customer at this stage.
In every country we support, the starting point is the same. Your customer is the person (or people) instructing you to set it up. The people who will own or control the new structure also need to be identified and verified. The details vary by country:
Country | What the guidance says |
|---|---|
Australia | Setting up a company or trust is a designated service (item 6). AUSTRAC treats the person asking for the service as the customer, together with the new structure's key people: for a company, its beneficial owners and directors; for a trust, the trustee, settlor and beneficiaries. Initial CDD must be finished before you provide the service |
New Zealand | Forming a legal person or arrangement is a captured activity. Under regulation 5F of the AML/CFT (Definitions) Regulations, when you form one as an occasional activity, the customer is the person who instructs you. You must also take reasonable steps, based on risk, to verify anyone who will be a beneficial owner of the new entity |
United Kingdom | Company formation is a trust or company service under the Money Laundering Regulations 2017, and is treated as a business relationship even if it's a one-off. Do CDD on the person instructing you, and collect beneficial ownership details for the company you're forming. Follow your supervisor's guidance: HMRC's TCSP guidance, or your professional body's guidance (such as the CCAB guidance) |
South Africa | Forming companies and trusts is a trust and company service under item 2 of Schedule 1 to the FIC Act. Do CDD on the client instructing you, and identify the people who will own or control the new entity, as set out in your Risk Management and Compliance Programme (RMCP) and the FIC's guidance |
How to do it in OnboardMe
Create the proposal and add each individual as a client. If they aren't clients yet, use Create as lead or Enable onboarding on the CDD step. See Starting a CDD case.
On the Customer Due Diligence step, create a case for each person. Use the Entity scope tabs to move between them.
In each case, work through the individual checklist for that person.
In F. Nature and purpose, record the company or trust you're setting up and the person's role in it, for example "Director and 50% shareholder of new company, XYZ Pty Ltd" (or XYZ Ltd in New Zealand and the UK, or XYZ (Pty) Ltd in South Africa).
If someone will own or control the new structure but isn't one of the people instructing you, verify them too. Add them as a client and run their own case, or add them as a participant, following your AML program.
Tip: Some questions may read as if they're about the new entity. That's expected. Answer them for the person, with the new structure in mind, and use the nature and purpose notes to explain the context.
Once the company or trust exists
If you'll keep providing designated services to the new company or trust, run a separate CDD case on it once it's set up. Link the individuals as its beneficial owners and controllers. Their ID verification on file carries across, so you won't need to verify them again.
Couples, partners and families
When two or more people engage you together, each is a customer in their own right. Add each person as a client on the proposal and create a case for each. Each person gets their own risk rating and sign-off.
Next steps
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