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The AML CFT Act allows entities that are related to each other (within the meaning of the Companies Act 1993) to form designated business groups (DBGs).    An advantage of forming a DBG is that each member of the DBG does not need to develop separate AML CFT programmes.  Members (business entities) may share various provisions of the same AML CFT programme.  

Provisions of the programme that can be shared include -

  • record keeping
  • account monitoring
  • ongoing customer due diligence
  • annual reporting
  • procedures, policies and controls of the above provisions

Each member (business entity) will still be required to undertake individual AML CFT risk assessments.   Risk assessments should assess individual risk within business lines and the consolidated risk across all activities and entities of the DBG.

A risk or deficiency in one member of a DBG may increase concerns in other parts of the DBG.   Senior management will need to decide whether those members should operate under enhanced controls and therefore under separate AML CFT programmes.