On-Boarding Considerations for Clients in High Risk Countries

Cover Image for On-Boarding Considerations for Clients in High Risk Countries

| Courtney Price

Bookkeepers play a crucial role in the financial integrity and compliance of businesses, particularly when it comes to onboarding new clients. This is especially true in the context of sanctions and high-risk third countries, where due diligence is not just a best practice but a regulatory requirement.

In Bookkeeping - AML - Law & Regulations Update, Elaine Jackson outlines key considerations for bookkeepers during the client onboarding process, with a focus on navigating the complexities associated with sanctions and high-risk jurisdictions.

Initial Client Enquiry

The onboarding process begins with an initial enquiry from a potential client. Bookkeepers should pay close attention to the email address and the person's email signoff, as these can provide early indicators of the client's legitimacy and intent. It is also important to record this information and carry out background checks. If the client mentions a referral, identifying the source of this referral is essential and must be done in compliance with GDPR regulations.

Face-to-Face Meeting

Arranging a face-to-face meeting is a critical next step. During this meeting, bookkeepers should inquire about the nature of the client's business, their future plans, and the beneficial owners involved. Understanding the client's personal circumstances, such as their address, relationships, and associates—particularly politically exposed persons (PEPs)—is vital for assessing risk. Additionally, bookkeepers should ascertain why the client is changing accountants and why they have chosen your firm, as well as what services they need and if there are other service providers involved.

Background Checks

Conducting thorough background checks is a cornerstone of the onboarding process. This includes a company search to review financials, filings, and previous agents, as well as internet searches on both the individual and the company. A search on sanctions lists is imperative to ensure compliance with international regulations. All these steps should be taken with a mindful approach to GDPR, particularly when checking the source of referrals.

Quoting Services

After gathering sufficient information, bookkeepers should provide a quote for services, outlining what will be provided and at what cost. It is advisable to offer a meeting to discuss and finalise the quote acceptance and to outline the documentation needed for the upcoming onboarding meeting.

Client On-Boarding Meeting

The onboarding meeting is where bookkeepers obtain copies of identification, address verification, and authorisation to seek professional clearance from the client's previous accountant. Discussions should cover the client's accumulated wealth, source of funds, and the types of transactions that will occur within the business. It is important to assess whether there will be large or complex transactions or any exceeding €15,000. Customer Due Diligence (CDD) and the requirement of an annual review should be explained to the client, along with the proposed risk level and its implications. Clients should be advised to inform the bookkeeper about any changes in beneficial ownership, business services, or location. Finally, obtaining a signed engagement letter formalises the client-bookkeeper relationship.

Continuous Risk Monitoring

An integral part of the onboarding process is the establishment of continuous risk monitoring protocols. This includes customer due diligence and annual reviews to ensure ongoing compliance and service quality. By adhering to these standards, bookkeepers can maintain a robust defence against financial crimes and regulatory breaches.

Bookkeepers should exercise a high degree of vigilance and thoroughness when onboarding clients, particularly those with connections to sanctions and high-risk third countries. By following the outlined considerations, bookkeepers can uphold ethical standards, ensure truthful communication, and contribute to the overall financial security of the businesses they serve.

For the full session, please click here. In this course, Elaine Jackson covers the following topics;

  • What is Money Laundering
  • Who Regulates Anti-Money Laundering Compliance
  • What are the current Laws & Regulations
  • On Boarding Considerations (Sanctions and High Risk Third Countries)

The contents of this article are meant as a guide only and are not a substitute for professional advice. The author/s accept no responsibility for any action taken, or refrained from, as a result of the material contained in this document. Specific advice should be obtained before acting or refraining from acting, in connection with the matters dealt with in this article.

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About the Author

Courtney Price is a content creator for CPDStore. Courtney joined us during the COVID-19 pandemic and has been involved in the ever-evolving world of accounting ever since. Her passion for reading and writing, coupled with her degree in copywriting from Vega School has allowed her to channel her creativity and expertise into crafting engaging and informative content.


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