C. Reliance on a Third Party to Implement Due Diligence Measures

No: 18318/486

Date(g): 17/11/2019 | Date(h): 20/3/1441

Effective from 2019-11-17 - Nov 16 2019
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The financial institution may rely on another financial institution or any of the owners of DNFBPs to implement the due diligence measures. However, when a financial institution carries out the due diligence measures itself, it will be in a better position to identify and assess customer risks, especially when such measures involve meeting customers in person.
In all cases, in accordance with the obligations mentioned in the Anti- Money Laundering Law, the Law on Combating Terrorism Crimes and Financing, and their Implementing Regulations, the responsibility for implementing due diligence measures shall rest with the financial institution seeking assistance from another party as such financial institution is fully responsible for complying with the regulatory requirements relating to due diligence and Saudi Central Bank’s Instructions for Outsourcing.
Article (7/10) of the Implementing Regulations of the Anti-Money Laundering Law allows the financial institution to rely on another financial institution or any of the owners of DNFBPs to carry out the due diligence measures, including entities that are part of the same financial group. Articles (7/11) and (7/13) of the Implementing Regulations specify the conditions that must be fulfilled by the financial institution prior to reliance on another party.
3.22	The financial institution may rely on a third party, whether it is a financial institution or any of the owners of DNFBPs, to implement the due diligence measures, in accordance with the following:
	a)	The financial institution shall ensure that the third party is subject to regulation and supervision and that it applies due diligence and record-keeping measures as stated in the Anti-Money Laundering Law, the Law on Combating Terrorism Crimes and Financing, and their Implementing Regulations.
	b)	The financial institution shall take actions to ensure that due diligence information is provided by the third party upon request and without delay.
	c)	The financial institution shall immediately obtain all information related to due diligence, including simplified and enhanced due diligence measures, from the third party.
	d)	The financial institution shall take into consideration the information available to the AMLPC, the PCCT, and the SAFIU on high-risk countries when determining the countries in which the third party may be conducting business.
3.23	The financial institution shall assess the ML/TF risks associated with reliance on a third party and, therefore, it shall develop and apply appropriate policies and procedures for risk management. Such procedures may include the following:
	a)	Identification of the minimum due diligence requirements to be met by the third party.
	b)	Conduct frequent examination of obtained information and documents to apply the due diligence measures, including enhanced or simplified due diligence.
	c)	Monitoring of customers and business relationships established them through reliance on a third party as well as application of intensive control measures towards them in accordance with the ML/TF risk assessment results.
3.24	The financial institution shall periodically verify (at least annually) that the third party has the sufficient capabilities and powers required to fulfill the due diligence requirements in a professional manner. The financial institution shall also continuously assess the third party's compliance with such requirements.
3.25	The financial institution has the right to directly obtain the customer due diligence information from the third party relied upon to perform due diligence, if such party has previously implemented due diligence measures for the same customer when dealing with another financial institution, taking into account that the required information shall be complete and that due diligence measures are constantly applied according to the requirements mentioned in Paragraph (3.7) in the Due Diligence Section.