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The recommended industry standard for Pension Products is to apply simplified Due Diligence. Therefore apart from on-going monitoring for Sanction and PEPs, initial Customer Due Diligence does not apply to either the Customer or the Scheme.

However, where a firm considers that there are features of the nature of the employer or the scheme that present an increased risk of Money Laundering, the following Enhanced Due Diligence measures may be appropriate.

  1. Obtaining details of the Trustees and the Entity (usually the employer), a copy of the relevant Trust Deeds, and verifying the Scheme’s HMRC/PSO number (this can be done, for example, by sight of the scheme's HMRC approval letter).
    Note - HMRC does not now issue approval letters. However, if the firm has any concerns, on application and with the relevant authority, HMRC will provide documentary confirmation regarding the existence of the Scheme.
  2. Verifying the identity of the employer, or other Corporate Entity paying into the fund, in accordance with Part I, Chapter 5. Check that the firm is trading and appropriate to provide employees with a pension through a Companies House search or a visit to the premises.

Firms are not required to assume that a payment from an unidentified source (e.g.) by wire transfer from a UK Bank or Building Society or a Bankers Draft or a UK Building Society counter cheque that does not identify the account from which it is made is being made by a third party unless they are aware of some fact that suggests that this is, or may be the case.

Where an Insurer decides to apply simplified Due Diligence to a particular product or type of business, there is no requirement to identify or verify the identity of Beneficial Owners and/or Controllers.   Ongoing monitoring, however, is still required.

In addition, the destination of funds at the time of redemption can be used as evidence of identity in cases where there has not previously been a requirement to verify, for example where the Firm had been able to rely on an exemption. In these cases, depending on the Firm's assessment of the risk presented by the situation, including the circumstances in which the Customer acquired the investment, it may be possible to satisfy the standard identification requirement by means of a payment to an account with a UK or EU Regulated Credit Institution in the sole or joint name of the Customer.

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