Verification

The regulations leave it up to the private bank to decide who does the necessary reputational searches to determine the level of risk to be assigned to new customers. The RM, however, has the job of obtaining information about anyone the MLRO asks to provide a written reference about the customer. References should only be trusted if they are addressed only to the firm and come from the referee directly (5.17).

Extra/enhanced due diligence or EDD

This higher level of information-gathering occurs when the HNW in question is a “politically exposed person” (in which case, senior management sign-off is always needed) or poses a high money laundering risk in some other way. The JMLSG leaves the details up to the firm. Transaction-monitoring also has to take place, as the only true way of “knowing one's customer” is through his transactions. This, however, is not earmarked as a job for the relationship manager and is generally done centrally with the aid of software.

Although the JMLSG notes expect RMs to gather plenty of information and sit on the “front line” of their firms' anti-money laundering efforts, their compliance tasks are essentially menial ones. If something is amiss they might be expected to be the first to form suspicions, but the suspicious transaction reporting process is generally supervised centrally by the compliance department. The JMLSG certainly does not expect the RM to “mastermind” the compliance effort.