Article 20 Customer due diligence measures

1. identifying the customer and verifying the customer’s identity;

2. identifying the beneficial ownersmeans any natural person who ultimately owns or controls a legal entity or an express trust or similar legal arrangement; and taking reasonable measures to verify their identity so that the obliged entity is satisfied that it knows who the beneficial ownermeans any natural person who ultimately owns or controls a legal entity or an express trust or similar legal arrangement; is and that it understands the ownership and control structure of the customer;

3. assessing and, as appropriate, obtaining information on and understanding the purpose and intended nature of the business relationshipmeans a business, professional or commercial relationship connected with the professional activities of an obliged entity, which is set up between an obliged entity and a customer, including in the absence of a written contract and which is expected to have, at the time when the contact is established, or which subsequently acquires, an element of repetition or duration; or the occasional transactions;

4. verifying whether the customer or the beneficial ownersmeans any natural person who ultimately owns or controls a legal entity or an express trust or similar legal arrangement; are subject to targeted financial sanctionsmeans both asset freezing and prohibitions to make funds or other assets available, directly or indirectly, for the benefit of designated persons and entities pursuant to Council Decisions adopted on the basis of Article 29 TEU and Council Regulations adopted on the basis of Article 215 TFEU;, and, in the case of a customer or party to a legal arrangementmeans an express trust or an arrangement which has a similar structure or function to an express trust, including fiducie and certain types of Treuhand and fideicomiso; who is a legal entity, whether natural or legal persons subject to targeted financial sanctionsmeans both asset freezing and prohibitions to make funds or other assets available, directly or indirectly, for the benefit of designated persons and entities pursuant to Council Decisions adopted on the basis of Article 29 TEU and Council Regulations adopted on the basis of Article 215 TFEU; control the legal entity or have more than 50 % of the proprietary rights of that legal entity or majority interest in it, whether individually or collectively;

5. assessing and, as appropriate, obtaining information on the nature of the customers’ business, including, in the case of undertakings, whether they carry out activities, or of their employment or occupation;

6. conducting ongoing monitoring of the business relationshipmeans a business, professional or commercial relationship connected with the professional activities of an obliged entity, which is set up between an obliged entity and a customer, including in the absence of a written contract and which is expected to have, at the time when the contact is established, or which subsequently acquires, an element of repetition or duration; including scrutiny of transactions undertaken throughout the course of the business relationshipmeans a business, professional or commercial relationship connected with the professional activities of an obliged entity, which is set up between an obliged entity and a customer, including in the absence of a written contract and which is expected to have, at the time when the contact is established, or which subsequently acquires, an element of repetition or duration; to ensure that the transactions being conducted are consistent with the obliged entity’s knowledge of the customer, the business and risk profile, including where necessary the source of fundsor ‘property’ means property as defined in Article 2, point (2), of Directive (EU) 2018/1673;;

7. determining whether the customer, the beneficial ownermeans any natural person who ultimately owns or controls a legal entity or an express trust or similar legal arrangement; of the customer and, where relevant, the person on whose behalf or for the benefit of whom a transaction or activity is being carried out is a politically exposed personmeans a natural person who is or has been entrusted with prominent public functions including:in a Member State:heads of State, heads of government, ministers and deputy or assistant ministers;members of parliament or of similar legislative bodies;members of the governing bodies of political parties that hold seats in national executive or legislative bodies, or in regional or local executive or legislative bodies representing constituencies of at least 50 000 inhabitants;members of supreme courts, of constitutional courts or of other high-level judicial bodies, the decisions of which are not subject to further appeal, except in exceptional circumstances;members of courts of auditors or of the boards of central banks;ambassadors, chargés d’affaires and high-ranking officers in the armed forces;members of the administrative, management or supervisory bodies of enterprises controlled under any of the relationships listed in Article 22 of Directive 2013/34/EU either by the state, or, where those enterprises qualify as medium sized or large undertakings or medium sized or large groups, as defined in Article 3(3), (4), (6) and (7) of that Directive, by regional or local authorities;heads of regional and local authorities, including groupings of municipalities and metropolitan regions, with at least 50 000 inhabitants;other prominent public functions provided for by Member States;in an international organisation:the highest ranking officials, their deputies and members of the board or equivalent functions of an international organisation;representatives to a Member State or to the Union;at Union level:functions at the level of Union institutions and bodies that are equivalent to those listed in points (a) (i), (ii), (iv), (v) and (vi);in a third country:functions that are equivalent to those listed in point (a);, a family membermeans:a spouse, or a person in a registered partnership or civil union or in a similar arrangement;a child and a spouse of, or a person in a registered partnership or civil union or in a similar arrangement with, that child;a parent;for the functions referred to in point (34)(a)(i) and equivalent functions at Union level or in a third country, a sibling; or person known to be a close associate;

8. where a transaction or activity is being conducted on behalf of or for the benefit of natural persons other than the customer, identifying and verifying the identity of those natural persons;

9. verifying that any person purporting to act on behalf of the customer is so authorised and identify and verify their identity.

Obliged entities shall determine the extent of the measures referred to in paragraph 1 on the basis of an individual analysis of the risks of money launderingmeans the conduct set out in Article 3, paragraphs 1 and 5, of Directive (EU) 2018/1673 including aiding and abetting, inciting and attempting to commit that conduct, whether the activities which generated the property to be laundered were carried out on the territory of a Member State or on that of a third country; knowledge, intent or purpose required as an element of that conduct may be inferred from objective factual circumstances; and terrorist financingmeans the conduct set out in Article 11 of Directive (EU) 2017/541 including aiding and abetting, inciting and attempting to commit that conduct, whether carried out on the territory of a Member State or on that of a third country; knowledge, intent or purpose required as an element of that conduct may be inferred from objective factual circumstances; having regard to the specific characteristics of the client and of the business relationshipmeans a business, professional or commercial relationship connected with the professional activities of an obliged entity, which is set up between an obliged entity and a customer, including in the absence of a written contract and which is expected to have, at the time when the contact is established, or which subsequently acquires, an element of repetition or duration; or occasional transaction, and taking into account the business-wide risk assessment by the obliged entity pursuant to Article 10 and the money launderingmeans the conduct set out in Article 3, paragraphs 1 and 5, of Directive (EU) 2018/1673 including aiding and abetting, inciting and attempting to commit that conduct, whether the activities which generated the property to be laundered were carried out on the territory of a Member State or on that of a third country; knowledge, intent or purpose required as an element of that conduct may be inferred from objective factual circumstances; and terrorist financingmeans the conduct set out in Article 11 of Directive (EU) 2017/541 including aiding and abetting, inciting and attempting to commit that conduct, whether carried out on the territory of a Member State or on that of a third country; knowledge, intent or purpose required as an element of that conduct may be inferred from objective factual circumstances; variables set out in Annex I as well as the risk factors set out in Annexes II and III.

Where obliged entities identify an increased risk of money launderingmeans the conduct set out in Article 3, paragraphs 1 and 5, of Directive (EU) 2018/1673 including aiding and abetting, inciting and attempting to commit that conduct, whether the activities which generated the property to be laundered were carried out on the territory of a Member State or on that of a third country; knowledge, intent or purpose required as an element of that conduct may be inferred from objective factual circumstances; or terrorist financingmeans the conduct set out in Article 11 of Directive (EU) 2017/541 including aiding and abetting, inciting and attempting to commit that conduct, whether carried out on the territory of a Member State or on that of a third country; knowledge, intent or purpose required as an element of that conduct may be inferred from objective factual circumstances; they shall apply enhanced due diligence measures pursuant to Section 4 of this Chapter. Where situations of lower risk are identified, obliged entities may apply simplified due diligence measures pursuant to Section 3 of this Chapter.

By 10 July 2026, AMLA shall issue guidelines on the risk variables and risk factors to be taken into account by obliged entities when entering into business relationshipsmeans a business, professional or commercial relationship connected with the professional activities of an obliged entity, which is set up between an obliged entity and a customer, including in the absence of a written contract and which is expected to have, at the time when the contact is established, or which subsequently acquires, an element of repetition or duration; or carrying out occasional transactions.

Obliged entities shall at all times be able to demonstrate to their supervisorsmeans the body entrusted with responsibilities aimed at ensuring compliance by obliged entities with the requirements of this Regulation, including AMLA when performing the tasks entrusted to it in Article 5(2) of Regulation (EU) 2024/1620; that the measures taken are appropriate in view of the risks of money launderingmeans the conduct set out in Article 3, paragraphs 1 and 5, of Directive (EU) 2018/1673 including aiding and abetting, inciting and attempting to commit that conduct, whether the activities which generated the property to be laundered were carried out on the territory of a Member State or on that of a third country; knowledge, intent or purpose required as an element of that conduct may be inferred from objective factual circumstances; and terrorist financingmeans the conduct set out in Article 11 of Directive (EU) 2017/541 including aiding and abetting, inciting and attempting to commit that conduct, whether carried out on the territory of a Member State or on that of a third country; knowledge, intent or purpose required as an element of that conduct may be inferred from objective factual circumstances; that have been identified.