When must accountancy firms conduct customer due diligence?

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When must an accountancy firm conduct customer due diligence?

All accountancy firms are subject to the Anti-Money Laundering Act. This includes an obligation to take customer due diligence (CDD) measures and to assess the risk for each client — not only at the start of an engagement but also on an ongoing basis.

In practice, it is not always obvious when the requirements apply. Which engagements are in scope? What applies to existing clients? How is the risk assessment affected by the client’s business? We assist with customer due diligence for accountancy firms and with all other aspects of the anti-money laundering framework.

For customer due diligence to work in practice, firms also need well-designed processes and tools that make it easy for staff to collect and verify the information used in CDD. Digital solutions can streamline identification and risk assessment, but it remains essential to understand what the law requires. Clear internal accountabilities reduce the risk that important steps are missed when a new client is onboarded or when existing client relationships change. In this way the firm can demonstrate a proactive, structured approach to preventing money laundering.

Situations that trigger customer due diligence

Customer due diligence must be completed before a new business relationship begins — and also when certain changes occur over the course of the client relationship. This applies whether the client is a sole trader, a limited company or an association.

Examples of situations when customer due diligence is required include:

At the start of a new ongoing engagement, for example bookkeeping or advisory services.
When there is a significant change in the client’s business.
When the beneficial owner or authorised representative changes.
When the client’s risk profile changes.
If anything in the business relationship raises suspicion or deviates from the expected pattern.

Knowing these situations is essential to meet the framework and avoid sanctions during supervision by the Swedish County Administrative Board (Länsstyrelsen). At the same time, measures must be effective and integrated into the firm’s ways of working.

A common challenge for accountancy firms is how to follow up customer due diligence over time. The rules require the firm to keep information up to date, particularly when changes affect the risk assessment. This can involve a new owner, expansion into new markets or a sudden change in transaction history. With clear procedures and ongoing training of staff, it becomes easier to detect anomalies in good time.

Legal support can help interpret the requirements correctly and tailor procedures to the needs of the business. Our AML lawyers offer both advisory services and hands-on support to build a sustainable approach to complying with the anti-money laundering framework.