Client AML - LegalOffice User Guides

AML for Clients Overview

The LegalOffice AML module has been developed to complement a firms existing AML programme.

There are many advantages gained by using the LegalOffice AML module. These programs allow you to create a digital record of the DD process completed and then, going forward, manage each client individually so that an audit record of compliance is retained. Transaction activity can be restricted or limited depending on a clients AML status.

The LegalOffice AML client module includes

client risk assessment
standard due diligence
enhanced due diligence
exempt due diligence
delayed due diligence
digital record of identity verification
extensive reporting

AML for Clients Procedures

The procedure when starting new clients will involve the following steps;

Completing the Client Risk Assessment

Open the client maintenance program and load your client record. Use the right click context menu and select ‘Risk Assessment’ or, simply click on the Risk Level icon.

The following CRA screen will display. Answer Y, N or leave the field blank if you do not know the answer. You can return later to complete the form and make changes if necessary. Your answers and workings will be recorded and available for future reference. An audit log will record the username and date the CRA was completed, changed and CO approved.

Your responses to the questions should ‘show your workings’ of how you decided upon the overall rating. Use the ‘Are there any other factors’ field to record your workings.

There are four levels of Risk – Unspecified, Exempt, Standard and High;

Unspecified means you have not answered one or more questions.
Exempt means all client work is considered to be a ‘Non Captured Activity’
Standard means the answers indicate this is a standard risk client.
High means the client is deemed higher risk and enhanced due diligence is required.

The CRA assessment will suggest an overall risk level and you cannot change this. The client risk level will be set with this value unless you override this value using the client maintenance program. If you do override this, make sure you record why you are making this change in the ‘Are there any other factors’ field.

Click OK to save the assessment.

You will be returned to client maintenance to continue your client maintenance process. You can now override the suggested risk level if required.

Note that you must click the Save button before you exit client maintenance as this saves and creates the CRA record.

Authorise CRA from Client Inquiry

Your internal AML programme may require that a Partner authorises any completed CRA. If this is the case, the authorising Partner should;

Open the client inquiry program for the appropriate client
Switch to the Additional tab
Note the client risk level
Open the risk assessment using the right click context menu and select ‘Risk Assessment’
Review the assessment and confirm the suggested risk level is correct.

When satisfied the assessment is in order, authorise the assessment using the right click context menu option ‘Approved by Me’.

The assessment is now set as having been approved.

Completing Client Due Diligence

Due Diligence (CDD) can be completed from the client maintenance program during client creation or, from client inquiry if the client has already been created and changes are required. CDD should be done after you have completed the CRA as that process determines whether you need to complete standard due diligence (CDD) or enhanced due diligence (EDD).

Complete Due Diligence from Client Maintenance

Open the client maintenance program. The CRA process should already have been completed and have set the CDD with a default setting. You can change this setting if required. Note if your CRA is set to HIGH then you must set CDD to ENHANCED.

CDD allows you to record identity verification information and keep a digital record of any supporting documentation.

As an example, for an individual client you would record personal identity information e.g. a passport, drivers licence and physical address details e.g. a utilities bill.

For a company client, you would record identity information for the company itself e.g. Certificate of Incorporation as well as personal identity information for directors and shareholders.

Use the mouse right click button and select ‘Due Diligence’ or, simply click on the DD icon to open the DD selection screen. Any Name Identities will be displayed. These are the Identities who make up your client.

For an individual client there will generally only be one DD record.

Other client types e.g. joint clients, companies, trusts etc. will have multiple DD records. As an example, a company client will have the Company as a Name DD Identity plus it would also have DD records for directors and possibly shareholders.

To edit or view identification information, select the line you want to edit and use the mouse double click or right click buttons to open the record.

To add a new DD record, use the mouse right click button and select Add another DD Record.

Enter a label describing the DD relationship you are creating. Use the drop down menu to select an existing relationship type or manually add a label e.g. Director, Trustee. Press the Tab key to continue.

The Identity Selection screen will display. This is the same program used to search for and add client Name Identities. As with adding any Identity, enter the name and search to see whether they already exist in your database. If they do, simply select the Identity. If they do not exist, click the New Identity button and create them from new.

You can now add full details for the DD Identity including any ID verification information.

When you finished adding the ID information, tick the Verify Complete box to indicate identification has been fully completed.

The client is now available to be Compliance Officer approved using AML Manager.

Reviewing or editing Due Diligence from Client Inquiry

Open Client Inquiry for the specified client and switch to the ‘Additional’ tab.

Displayed is the client risk level, due diligence level and whether or not the client has been Compliance Office approved.

To review or edit DD, use the right click menu option ‘Client Due Diligence’ to open the DD information screen. The Due Diligence screen will display and function in the same manner as described earlier as if it were opened from client maintenance.

Exempt Clients

The AML legislation applies to work defined as being a ‘captured activity’. Where the client activity is not a ‘captured activity’, the firm can elect not to complete DD. In these cases, the EXEMPT status can be used in LegalOffice to record this decision and any relevant explanation.

The EXEMPT process is to set the client matter risk assessment level to EXEMPT and for the firms Compliance Officer to approve the client.

Exempting a Client from Due Diligence using Client Maintenance

Open the client record using the client maintenance program.

Use the drop down menu for the CRA field and set the client risk level to EXEMPT. Then use the drop down menu for the DD field and set the DD level to None.

Note that you must click the Save button before you exit client maintenance as this saves and creates the Client Risk Assessment record.

The client is now available in the AML manager program ready for Compliance officer approval.

Delayed Client Due Diligence

You are not meant to commence work until client identification and verification has been completed. However, in consultation with your compliance officer, you may commence work before completing client identification and verification if:

The client has been identified
Doing so must be essential so as not to interrupt the normal business practice
There must be little risk of money laundering or terrorist financing occurring
Money laundering and terrorist financing risks are effectively managed through procedures of transaction limitations and account monitoring.
The client and/or matter risk assessment are completed.
Do not allow the matter to be finalized (e.g. final agreements to be signed, issue a legal opinion, pay away funds) until the client identification has been obtained and verified.
Client identification and verification must be completed as soon as practicable.

The DELAY process is to complete the CRA, set the client DD level as DELAYED and for the firms Compliance Officer to approve the client.

Delay completing Client DD using Client Maintenance

Open the client maintenance program and create your client record. When you are ready to complete the CRA, use the right click context menu and select ‘Risk Assessment’ or, simply click on the Risk Level icon

Your responses to the questions should ‘show your workings’ of how you decided upon the overall rating and include an explanation of why you are delaying DD for this client. Use the ‘Are there any other factors’ field to record your workings.

There are four levels of Risk – Unspecified, Exempt, Standard and High;

Unspecified means you have not answered one or more questions.
Exempt means all client work is considered to be a ‘Non Captured Activity’
Standard means the answers indicate this is a standard risk client.
High means the client is deemed higher risk and enhanced due diligence is required.

The CRA program will suggest an overall risk level. You cannot change this. The client will be set with this level unless you override the suggested risk using the client maintenance program. If you do override a client risk level, make sure you record why you are overriding the recommended setting in the ‘Are there any other factors’ field.

Click OK to save the assessment.

You will be returned to client maintenance to continue your client maintenance process. You can now override the suggested risk level if required.

Now set the Due Diligence level to DELAYED. You do not need to enter any identification information at this stage.

Note that you must click the Save button before you exit client maintenance as this saves and creates the CRA record.

The Client is now available in the AML manager program ready for Compliance officer approval.