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Status: You are viewing the version of the handbook as on 2005-06-30.

ML 3.2 The exceptions

ML 3.2.1R
  1. (1)

    This section sets out circumstances in which:

    1. (a)

      the duty in ML 3.1.3 R (1) (Identification of the client: the duty) need not be complied with; or

    2. (b)

      the relevant firm is required to take reasonable steps to establish the identity of a person for whom the client is acting.

  2. (1A)

    None of the rules in this section applies if the relevant firm:

    1. (a)

      knows or suspects; or

    2. (b)

      has reasonable grounds to know or suspect;

    in accordance with (2) that the client or the person on whose behalf he is or appears to be acting is engaged in money laundering.

  3. (2)

    The relevant firm will be taken to know or suspect or to have reasonable grounds to know or suspect as set out in (1A) if any member of the staff handling the transaction or potential transaction or managerially responsible for it knows or suspects or has reasonable grounds to know or suspect.1

When the duty to identify does not apply

ML 3.2.2R

The duty in ML 3.1.3 R (1) (Identification of the client: the duty) does not apply if:

  1. (1)

    the client is also:

    1. (a)

      a credit institution or financial institution covered by the Money Laundering Directive; or

    2. (b)

      an authorised professional firm; or

    3. (c)

      is regulated by an overseas regulatory authority (see ML 3.2.7 R) and is based or incorporated in a country (other than an EEA State) whose law contains comparable provisions to those contained in the Money Laundering Directive; or2

  2. (2)

    the transaction is:

    1. (a)

      a one-off transaction with a value of less than euro 15,000; or

    2. (b)

      is one of a number of transactions which are related and, when taken together, have a value of less than euro 15,000; or

  3. (3)

    with a view to carrying out a one-off transaction, the client (other than a money service operator) is introduced to the relevant firm by a person who has given the relevant firm a written assurance that in all such cases he obtains and records identification evidence, and:

    1. (a)

      the person who has given the written assurance is a credit institution or financial institution covered by the Money Laundering Directive, or an authorised professional firm, or an entity undertaking comparable activities in an EEA State; or

    2. (b)

      the person is regulated by an overseas regulatory authority (see ML 3.2.7 R) and is based or incorporated in a country (other than an EEA State) whose law contains comparable provisions to those contained in the Money Laundering Directive; or1

  4. (4)

    the proceeds of a one-off transaction;

    1. (a)

      are to be payable to the client but are then to be invested on his behalf;

    2. (b)

      are to be the subject of a record; and

    3. (c)

      can thereafter only be reinvested on his behalf or paid directly to him; or

  5. (5)

    when the transaction concerns a long-term insurance contract:

    1. (a)

      taken out in connection with a pension scheme relating to the client's employment or occupation, if the policy contains no surrender clause and cannot be used as security for a loan; or

    2. (b)

      where the premium is a single payment of no more than euro 2,500; or

    3. (c)

      where the premium payments do not exceed euro 1,000 in any calendar year.

ML 3.2.3G

A relevant firm is expected to take reasonable steps to determine whether or not the client falls within the exceptions in ML 3.2.2 R (1) and ML 3.2.2 R (3)(b).

ML 3.2.4R

[deleted]2

Where the client is acting for another person

ML 3.2.5R

Where the client acts, or appears to act, other than in the circumstances covered by ML 3.2.2 R (1) and ML 3.2.2 R (3) for another person, the relevant firm must take reasonable steps for the purpose of establishing the identity of that person.21

ML 3.2.6G

[deleted]2

Relevant overseas regulatory authorities

ML 3.2.7R

An overseas regulatory authority is relevant for the purposes of ML 3.2.2 R (3)(b) and ML 3.2.5 R if it falls within section 82 of the Companies Act 1989 (Request for assistance by overseas regulatory authority), in so far as it exercises the kind of regulatory functions described in that section.