The term “customer due diligence” refers to the obligations contained in the German Anti-Money Laundering Act (AMLA) which an obliged person has to fulfil in relation to its customers. They are contained in Sections 10 to 17 AMLA, and the Act distinguishes between general, simplified and enhanced due diligence obligations.
Pursuant to Section 10 para. 1 AMLA, the general due diligence obligations consist of the identification of the contracting party and, if applicable, the person acting on its behalf, as well as an investigation as to whether the person acting on behalf of the contracting party is authorised to do so; clarification as to whether the contracting party acts on behalf of a beneficial owner and, to the extent this applies, identification of this beneficial owner; the determination of the purpose and nature of the business relationship; the clarification of the PEP status; continuous monitoring of the business relationship and updating of the information collected.
If, on the basis of a risk analysis or in individual cases, the obliged person draws the conclusion that there is a higher risk of money laundering or terrorism financing, they must fulfil the enhanced due diligence obligations contained in Section 15 AMLA in addition to the general obligations in Section 10 para. 1 AMLA. If, on the other hand, the obliged person finds that there is only a low risk of money laundering or terrorism financing, the simplified due diligence obligations contained in Section 14 AMLA apply. However, it should be noted that even if the simplified due diligence obligations apply, the obliged person must still fulfil the entire list of obligations in Section 10 para. 1 AMLA. They are only able to reduce, to an adequate extent, the scope of the measures taken to fulfil the individual obligations. For example, the customer due diligence obligations need to be fulfilled when establishing a business relationship. Additionally, Section 10 para. 3 AMLA lists further triggers for when customer due diligence obligations need to be fulfilled.