Client research

Legal professionals that work on certain type of matters are usually obligated to research the client(s) that they are working for and register the outcome of that research in their matters.

Legalsense has an extensive module that can help registering the necessary information for this client research. This research is performed to prevent money-laundering (anti-money laundering) and the finance of terrorism. In Dutch, the law that deals with this is abbreviated as 'Wwft' (law to prevent money laundering and the financing of terrorism). The AML module is turned off by default in Legalsense (as not all Legalsense users have need to this module). If you are interested in using this module, please contact Legalsense support.

The AML-checklist can be found in Legalsense under Clients » AML. On the matter page, there is an AML information box and you can click-through to the Matter's AML checklist.

When clicking 'AML' in the Clients sub-menu, you will see the AML Matter Overview. This page allows you to see the AML status of every matter. The list can be filtered to only display completed or uncompleted matters and the information can be downloaded in bulk.

AML checklist

When clicking on one of the matters in the AML Matter Overview you will view the AML checklist for that matter. The checklist will indicate with yellow highlighted boxes what questions still need to be answered. The right-hand side displays an overview of these 'open questions'.

Please note that the information per client/party can be collapsed (hidden). By clicking the client name, the box will open and display all of its contents.

AML required: Yes/No

The first question is do determine whether the AML check is required (yes or no). If you answer Yes, a number of extra questions will appear. 

After answering Yes you are asked to describe the relationship or transaction (this is a required field). Optionally you can also fill in the 'Last check on this relation' values (two date fields). You can use this to periodically check clients that have not be checked for a long time.

If you choose No, you will be actively asked for a statement why this is not the case (this statement is mandatory). The field Last check on the relation is an optional field. You are not required to enter a date here. However, it is wise and necessary that you periodically check whether the client still meets the risk category, as determined at the start of the service provision (after all, the nature of the service provision may change and therefore there may be an AML obligation). Therefore, you can set a reminder here for the next check.

If several matters are linked to a client, Legalsense will copy that client's data onto the matter. The system asks permission for this, so you have to check here whether the data is still applicable in the new matter. If the data are correct, you can click on Accept copy.

Legal entity

For all involved clients/contacts you have to choose the legal entity. By default it will be set to 'unknown'. Choose a legal entity from the list and press 'Save': 

Depending on what legal entity you will choose, you will be asked to add documents. Legalsense will indicate which documents are required. 

Level of client risk

You can choose the risk category that this contact/transaction falls into, there are two options:

When you choose 'Low risk', you will need to provide an explanation why it is 'low risk' and provide a document that also proves this. For 'natural persons' a copy of their identity documents (made by the lawyer him/herself) is usually sufficient as proof. For other legal entities an extract of the trade register/chamber of commerce is usually sufficient (information officially needs to be retrieved and verified by the lawyer him/herself).

When you choose 'Normal/high risk' you will also be asked to provide certain documents (depending on what legal entity you are dealing with). Legalsense will indicate what documents need to be provided.

Add documents

You can upload/add documents by choosing 'Add'. Please note that Legalsense only accepts PDF documents in the AML module.

Internet search

Part of the research obligations is to perform an internet search. You can search on the internet for information about the client/contact/transaction. You can save the search results (e.g. Google search results, Google News etc.) as a PDF file and also upload this to Legalsense. You have to indicate whether you performed an internet search by choosing 'Yes' or 'No'.

Representatives

Indicate whether there is a representative (or several) and whether it is a Director or an Authorized Representative. When all of these are indicated, select List completed. If you want to change this later you can do so by choosing Edit.

You also have to choose the legal form of the representatives again. Depending on which legal form you choose, you will need to attach several documents. The system indicates which documents you still have to submit (in the yellow blocks).

The risk assessment must again be examined. Is there an increased risk? Then there are a number of additional steps that need to be taken:

UBO

If the client is a legal entity, you must identify the ultimate beneficial owner (Ultimate Benificial Owner or UBO) of the legal entity. An UBO is a natural person:

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

Identify and verify the identity of the UBO and keep this information in your records. The verification of the identity of the UBO depends on the risk estimated by you:

• in the case of low risk, a signed statement on the correctness of the identity of the ultimate interested party is sufficient.
• in the case of a normal or high risk, you should consult the Chamber of Commerce yourself, question colleagues (in the country of origin), consult the Internet or outsource an investigation to a specialized agency.

PEP

Determine whether the client or any eventual beneficial owner abroad is a Politically Exposed Person (PEP). This does not include politically exposed persons residing in the Netherlands or having the Dutch nationality. PEPs are politically exposed persons:

Natural persons who hold public office:

• Heads of State, Heads of Government, Ministers and State Secretaries;
• Members of parliament;
• Members of Supreme Courts, Constitutional Courts and other higher judicial bodies who deliver judgements against which no further appeal is possible;
• Members of courts of auditors or central bank boards of directors;
• Ambassadors, chargé d'affaires and senior army officers;
• Members of the administrative, management or supervisory bodies of public undertakings;

Immediate family members of the persons mentioned above:

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

In addition to associates, namely;

• the natural person who, together with or on behalf of the politically exposed person referred to above, is the ultimate beneficiary of a legal entity or has close business relations with that person;
• or is the sole beneficial owner of a legal entity set up for the actual benefit of the above-mentioned person.

If you are dealing with a PEP, there is always an increased risk and an enhanced customer due diligence should be initiated. Secure in your records that you have checked whether you are dealing with a PEP, even if it appears that your client is not a PEP.

Add client 

It is possible (optional) to add a client. The data of that client will then be copied. When you add a client you will have to go through all the steps described above again for that client and add the requested documents.

Have you gone through all the steps? Then the AML check is complete. 

Pre-setting matters to AML required

It is possible to set in advance whether certain matters have a AML required. You can do this under Matter types in the tab lists. See: Settings

Download

If you are asked to submit the collected documents (during a check-up) it is possible to download all matters including the accompanying documents. This can be done per matter or in bulk (as a ZIP file).