Keeping Records

Keeping appropriate records is extremely important for potential investigations. It also provides satisfactory evidence in relation to any allegation of failing to identify suspicious activities or breaching industry guidelines.

Part 3 of the Money Laundering Regulations lays down rules for internal record keeping. It requires customer records, including identification documents, verification correspondence and account opening mandates, to be kept for five years after the relationship with the customer has ended.

The date when the relationship with the customer has ended can be the date of:

• The closing of the account.
• The carrying out of a one-off transaction or the completion of a number of transactions.
• The commencement of proceedings to recover debts payable on insolvency.

All other records of activity on an account should also be kept for the same five year period.

Records may be kept on microfiche, CD or as computerised document images rather than in paper format. This can ease the burden of retaining records for five years. Each company tends to have its own procedures for record keeping.

Regardless of the statutory and recommended retention periods for records, all records of any customer where a suspicious transaction has been reported or where they are known to be under investigation, must be kept until the case is closed.