The DIA have released a new regulation that came into force on 9 July 2021. This new regulation requires entities to conduct customer due diligence around the existence and identity of nominee directors and nominee shareholders in companies, and nominee general partners in limited partnerships/limited overseas partnerships.
If a reporting entity establishes a business relationship with either a company with one or more nominee directors or a limited partnership/overseas limited partnership with one or more nominee general partners, it will be required to carry out enhanced due diligence.
The regulation introduces broad definitions for nominee directors, nominee shareholders, and nominee partners, essentially covering any situation where the above is required to carry out, or is accustomed to carrying out that role in accordance with the directions or instructions of another person who is not a person in that role (director, shareholder, or general partner respectively).
Reporting entities are expected to comply as soon as possible but the DIA have said there will be a transitional compliance period until 29 April 2022.
The regulation also amends the time period required for audits of risk assessment and AML/CFT programmes from 2 years to 3 years generally; or 4 years where the reporting entity’s AML/CFT supervisor notifies the reporting entity that a 4-year period applies.