Many CASPs already have robust AML/KYC programs. CARF due diligence can leverage this existing infrastructure while addressing tax-specific requirements.

Overlap Between AML and CARF

Common elements:

  • Customer identification
  • Identity verification
  • Beneficial ownership identification
  • Address verification
  • Ongoing monitoring

Integration Opportunities

Single Onboarding Flow

Combine AML and CARF requirements in one process:

  • Collect all information at once
  • Single identity verification
  • Unified document collection
  • Consistent user experience

Shared Data Repository

  • Single source of customer data
  • Consistent data quality
  • Easier maintenance
  • Unified audit trail
Efficiency Gains

CASPs that integrate AML and CARF due diligence typically see 30-40% reduction in onboarding time and significant cost savings from unified processes.

Gap Analysis

CARF-specific elements often missing from AML:

  • Tax residency declaration
  • TIN collection and validation
  • Self-certification forms
  • Entity classification for tax purposes
  • Place of birth (when TIN unavailable)

Process Design

Recommended approach:

  1. Map existing AML process
  2. Identify CARF-specific gaps
  3. Design integrated flow
  4. Implement additional collection points
  5. Test end-to-end process
Regulatory Separation

While processes can be integrated, ensure clear documentation and reporting lines for AML vs. tax compliance purposes. Regulators may audit these separately.

Technology Integration

  • Extend existing KYC platform
  • Add CARF-specific modules
  • Integrate TIN validation services
  • Build reporting data extraction

Conclusion

Leveraging existing AML infrastructure significantly reduces CARF implementation effort. Focus on addressing the gaps rather than building parallel systems.

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