AML checklist

Legal professionals working on certain matters must research their clients and document their findings, to help prevent money laundering and terrorism financing. Legalsense's AML module lets you record and manage this client research directly on the matter.

Important: In the Netherlands, this obligation falls under the Wwft (the Dutch law to prevent money laundering and the financing of terrorism).

Note: The AML module is disabled by default. Contact Legalsense support to have it enabled for your environment.

AML matter overview

Go to Matters → AML to open the AML matter overview, which shows the AML status for every matter. Filter by completed or uncompleted matters, and download information in bulk.

AML checklist

Click a matter in the AML matter overview to open its AML checklist. Yellow highlighted boxes indicate unanswered questions; an overview of open questions appears on the right side of the screen.

Click a client's name to collapse or expand their client/party information.

Determining whether AML is required

The first question on the checklist determines whether an AML check is required for the matter.

If you answer Yes, Legalsense shows several additional questions. Describe the relationship or transaction. This is a required field. Optionally, fill in the Last check on this relation date field, to periodically review clients that haven't been checked recently.

If you answer No, provide a mandatory statement explaining why. The Last check on the relation field is optional, but we recommend filling it in, to periodically verify that the client still meets the determined risk category. The nature of the services you provide can change over time, which may trigger AML obligations later.

Note: When multiple matters are linked to one client, Legalsense copies that client's existing AML data to the new matter and asks for your permission before doing so. Verify that the data still applies, then click Accept copy if it's correct.

AML checklist prompting you to accept AML data copied from an existing matter of the same client.

Legal entity

For each client or contact involved, select a legal entity (default: Unknown). Choose the legal entity from the list, then click Save.

Legal entity selection field on the AML checklist, with a Save button.

The documents Legalsense requires depend on the legal entity you select; Legalsense indicates which documents are necessary.

Level of client risk

Choose the risk category for this contact or transaction.

Risk category options on the AML checklist, ranging from low to high risk.

Low risk: provide an explanation and supporting documentation. For natural persons, a copy of their identity document (verified by you) is usually sufficient. For other entities, a trade register or chamber of commerce extract typically suffices, provided you retrieve and verify it officially.

Normal/high risk: provide the specific documents required for the legal entity type; Legalsense indicates which documents are needed.

Adding documents

Click Add to upload a document. The Legalsense AML module accepts PDF documents and images.

Add AML document form on the AML checklist, with the document upload field and the document kinds.

Internet search

Your research obligations include performing an internet search on the client. Save the results, for example from a Google search or Google News, as PDFs and upload them to Legalsense. Indicate whether you performed an internet search by selecting Yes or No.

Representatives

Indicate whether the client has one or more representatives, and their type (Executive, Authorized, or Contact person). Click Finalize list when finished; click Reopen for editing to make changes later.

Representatives section of the AML checklist, showing the list of representatives and their type.

Choose the legal form of each representative. Depending on your selection, Legalsense requires you to attach specific documents, and highlights any missing documents in yellow.

Important: Re-examine the risk assessment after adding representatives. An increased risk level requires additional steps.

AML checklist showing the additional steps required after a risk level increase.

UBO

For legal entity clients, identify the ultimate beneficial owner (UBO): a natural person who meets one or more of the following criteria:

• holds an interest of more than 25 percent in the entity's capital;
• exercises more than 25 percent of the voting rights at the general meeting;
• exercises effective control over the entity;
• is the beneficiary of 25 percent or more of the entity's capital or of a trust;
• holds special control over 25 percent or more of the entity's capital.

Identify and verify the UBO's identity, and keep a record of how you did so. The verification required depends on the estimated risk:

Low risk: a signed statement confirming the UBO's identity is sufficient.

Normal/high risk: consult the Chamber of Commerce, ask colleagues in the UBO's country of origin, search the internet, or outsource the investigation to a specialized agency.

PEP

Determine whether the client or beneficial owner is a politically exposed person (PEP). This excludes politically exposed persons who reside in the Netherlands or hold Dutch nationality.

PEPs include natural persons who hold, or have held, one of the following public offices:

• heads of state, heads of government, ministers, and state secretaries;
• members of parliament;
• members of the Supreme Court, the Constitutional Court, and other higher judicial bodies whose judgements are not open to further appeal;
• members of courts of auditors or of the boards of central banks;
• ambassadors, chargés d'affaires, and senior army officers;
• members of the administrative, management, or supervisory bodies of state-owned enterprises.

PEPs also include the following immediate family members:

• spouse;
• partner considered equivalent to a spouse under national law;
• children, and their spouses or partners;
• parents.

PEPs also include the following associates:

• natural persons who, jointly with the PEP or on the PEP's behalf, are the ultimate beneficial owners of a legal entity, or who otherwise have close business relations with the PEP;
• sole beneficial owners of a legal entity established for the actual benefit of the PEP.

Important: Involvement of a PEP always triggers an increased risk level and requires enhanced customer due diligence. Document every PEP check, even when you determine that the client is not a PEP.

Adding a client

Optionally, add another client to the matter. Their data copies automatically. Repeat the steps above for the new client, and add the requested documents.

Once you've completed all the steps above, the AML check is complete.

Pre-setting matters to AML required

You can pre-set the AML requirement for specific matter types under Settings → Lists → Matter types.

Downloading documents

When you need to submit the collected documents, for example during a compliance check-up, download all matters with their accompanying documents, either per matter or in bulk as a ZIP file.