CDD MEASURES

Credit and financial institutions should put in place risk-sensitive policies and procedures to ensure that their approach to applying customer due diligence (CDD) measures does not result in them unduly denying customers legitimate access to financial services. To comply with their obligations under Article 14(4) of Directive (EU) 2015/849, credit and financial institutions should set out in their policies and procedures the criteria they will use to determine on which grounds they will decide that a business relationship may be rejected or terminated or that a transaction may be denied. As part of this, they should set out in their policies, procedures and controls all options for mitigating higher ML/TF risks that they will consider applying before deciding to reject a customer on ML/TF risk grounds. These options should at least include ad-justing the level and intensity of monitoring and, where this is permitted under national law, the application of targeted restrictions to products or services. Institut ions’ policies and proce-dures should set out clearly in which situations the application of these mitigating measures may be appropriate.

Before taking a decision to reject or to terminate a business relationship, credit and financial institutions should satisfy themselves that they have considered and rejected all possible miti-gating measures that could reasonably be applied in the particular case, taking into account the ML/TF risk associated with the existing or prospective business relationship.