6‑25 Matters for initial customer due di6‑25 Matters for initial customer due diligence—nested services relationship

6‑25 Matters for initial customer due diligence—nested services relationship

For the purposes of paragraph 28(2)(g) of the Act, the following matters are specified in relation to a customer of a reporting entity when a designated service is proposed to be provided to the customer as part of a nested services relationship: (a) the ownership, control and management structures of: (i) the customer; and (ii) the ultimate parent of the customer (if any); (b) the nature, size and complexity of the customer’s business, including: (i) the products and services offered by the customer, and the delivery channels by which it provides services; and (ii) the kinds of customers that the customer of the reporting entity has; and (iii) the kinds of transactions that would be carried out on behalf of the customer’s own customers as part of the nested services relationship and the services that would be provided to those customers that relate to such transactions; (c) the country or countries: (i) in which the customer operates or of which it is a resident; and (ii) if the ultimate parent of the customer (if any) has group‑wide anti‑money laundering and counter‑terrorism financing policies, procedures, systems and controls, and the customer operates within those group‑wide requirements—in which the ultimate parent operates or of which it is a resident; (d) the existence and quality of any anti‑money laundering and counter‑terrorism financing regulation and supervision in the country or countries identified under paragraph (c) and the customer’s compliance practices in relation to those regulations; (e) the appropriateness of the customer’s anti‑money laundering and counter‑terrorism financing systems and controls; (f) the reputation, based on publicly available information, of the customer and the members (if any) of the business group of which the customer is a member that are a remitter, virtual asset service provider or financial institution, including whether the customer or any of those members has been the subject of: (i) a regulatory investigation relating to implementation of anti‑money laundering, counter‑terrorism financing or sanctions obligations; or (ii) adverse regulatory action relating to implementation of anti‑money laundering, counter‑terrorism financing or sanctions obligations; or (iii) an investigation or criminal or civil proceedings relating to money laundering, financing of terrorism or other serious crimes; (g) whether the customer of the reporting entity: (i) would undertake initial customer due diligence and ongoing customer due diligence in relation to its own customers who would be provided services as part of the nested services relationship; and (ii) would be able to provide to the reporting entity, on request, information collected when the customer of the reporting entity undertakes initial customer due diligence and ongoing customer due diligence in relation to its own customers, and the reliable and independent data used to verify the information; (h) whether the customer allows shell banks to receive services; (i) whether the customer of the reporting entity ensures that it does not provide services to its own customers in circumstances where those customers have a nested services relationship or correspondent banking relationship with a shell bank.