Handbook of Anti-Money Laundering.

CHAPTER 25RECORD-KEEPING

25.1 THE PURPOSE OF RECORD-KEEPING

Record-keeping is an essential feature of money-laundering-deterrence legislation in most countries. There is generally an obligation on firms to maintain appropriate money-laundering-deterrence records and controls in relation to the firm's business, with the idea being that maintaining an adequate audit trail is an essential component of combating money laundering. Typically, there will be a requirement to retain records concerning customer identification and transactions as evidence of work that the firm has conducted in complying with its local legal and regulatory obligations. Such information may also be used by the firm as evidence in the event that an investigation is subsequently conducted by a law-enforcement agency. Not only must records exist, but generally firms must take reasonable care to keep adequate records appropriate to the scale, nature and complexity of the business and to have them available as required by local regulation.

They are also generally under obligation to keep such records up to date. This requires the firm to contact the customer in some way to ensure that the documents contain current and valid information. Of course, this is not easy for former customers, but it is not even straightforward in respect of current customers. There may be opportunities for a firm to contact a customer in the course of relationship management activities, and during this process update their records. ...