Third Party Reliance Templates

What is Third Party Reliance?

Using third party reliance templates enables you to meet your AML and due diligence obligations whilst complying with the mandatory regulations. Third party reliance does exactly what it says, it enables a relevant person to rely on a third party for carrying out certain due diligence measures.

Part 4. Section 39(2)a of the Money Laundering Regulations states that a relevant individual or business may rely on another person to apply any of the customer due diligence measures required by sections 28(2) to (6) and (10) of the regulation. However, as the relevant entity remains liable for any failure to apply such measures, it is essential that effective policies and controls are in place.

Third Party Reliance Due Diligence

As stated in the above paragraph, third parties can be relied upon to obtain the information required by sections 28(2) to (6) and (10) of the Money Laundering Regulations. This includes, but is not limited to: –

Identifying the customer.
Verifying the customer’s identity.
Assessing and where appropriate obtaining information on, the purpose and intended nature of the business relationship or occasional transaction.
Obtaining the name, company number, registered office and directors details if the customer is a body corporate.
Identifying the beneficial owner(s).

Third Party Reliance Policies & Controls

When a relevant person relies on a third party, they must follow regulatory processes to ensure that the mandatory information is obtained immediately. Where a third party is carrying out the customer due diligence measures, the information obtained must satisfy the requirements of regulation 28(2) to (6) and (10).

There should be an agreement in place between the relevant person and third party which sets out the responsibilities and obligations of both parties. These details should include immediate access to the due dilience information, as well as any supporting evidence. The third party is also required to retain copies of the mandatory data and documents for the period referred to in section 40 of the regulation.

You don’thave to write your AML or due diligence policies and controls from scratch. Join over 8500 organisations who use the Know Your Compliance Limited policies and templates to comply with mandatory regulations. Our Due DIlience & Client Risk Toolkit now contains 4 essential third party reliance templates. These have been designed to help you meet the MLR requirements when relying on a third party to carry out customer due diligence measures. Better still, if you are also looking for a complete AML, risk assessment, due diligence and ABC policy toolkit, our AML Toolkit also contains the third party reliance templates.