Art. 25 Identification of the purpose and intended nature of a business relationship or occasional transaction | Anti-money laundering regulation (AMLR) | AML

This article sits within the customer due diligence framework and addresses the obligation of obliged entities to understand the purpose and intended nature of a business relationship or occasional transaction before it begins.

Rather than simply identifying who a customer is, this article focuses on the "why" — ensuring the obliged entity gathers enough contextual information to make sense of the relationship or transaction.

A specific carve-out applies to obliged entities dealing in high-value goods under Article 74, who must additionally determine whether those goods are intended for commercial or non-commercial use.

Important points:

Before entering a business relationship or performing an occasional transaction, obtain information on the purpose, economic rationale, estimated activity amounts, source and destination of funds, and the customer's business activity or occupation.
The obligation to gather this information is conditional — it applies "where necessary," meaning it is not a blanket requirement in every case.
Obliged entities covered by Article 74 (those dealing in high-value goods) must also establish whether the intended use of those goods is commercial or non-commercial.

Before entering into a business relationship or performing an occasional transaction, an obliged entity shall assure itself that it understands its purpose and intended nature. To that end, the obliged entity shall obtain, where necessary, information on:
1. the purpose and economic rationale of the occasional transaction or business relationship;
2. the estimated amount of the envisaged activities;
3. the source of funds;
4. the destination of funds;
5. the business activity or the occupation of the customer.
For the purposes of the first paragraph, point (a), of this Article, obliged entities covered by Article 74 shall collect information in order to determine whether the intended use of high value goods referred to in that Article is for commercial or non-commercial purposes.