Reliance in both directions
built around s37A and s38
Sections 37A and 38 of the AML/CTF Act let you rely on customer due diligence (CDD) carried out by another reporting entity (or a regulated foreign equivalent), but only if the conditions in the Act and Rules are met. duely's reliance partner registry records each one: the partner, the scope, the agreement, the last review and the expiry date.
Reliance partners
Illustrative
- Partner one s37A, written arrangement Review due in 30 days
- Partner two s38, case-by-case reliance Current
- Reliance request Scope, deadline and signatures Response recorded
- Agreement Generated from the registry PDF
Why this matters
Reliance saves work. Your firm doesn't need to re-verify a customer your bank has already verified, provided the legal conditions are met. Those conditions are strict. Under a written arrangement (s37A), you must assess the arrangement at least every 2 years and record each assessment (s37B, Rules 6-30). For case-by-case reliance (s38), you must have reasonable grounds to believe relying on that procedure is appropriate to the risk, and document why (Rules 6-31).
In duely, every reliance partner has a record with their entity details, the scope of reliance, the agreement, the review schedule and the expiry date. The calendar shows each review or expiry as it comes due. When an evidence pack is generated for an engagement that used reliance, the partner reference is included.
What's included
Reliance partner registry
One record per partner, with entity details, scope of reliance, contact details and the engagements that depend on the arrangement.
s37A vs s38 distinction
duely records which section your reliance falls under, s37A (reliance under a written agreement or arrangement, assessed regularly under s37B) or s38 (case-by-case reliance without such an arrangement), so the right conditions are applied to each partner. Section 37 is the agency rule, not a reliance section.
Outbound reliance requests
Request a customer's CDD from another reporting entity from the portal, with a defined scope and deadline. The request is tracked through sent, agreed and completed. If the other entity refuses, the refusal is recorded on file, so the record shows you asked.
Inbound reliance requests
Another entity can request a customer's CDD from your firm. The request is matched to the customer, the customer approves by email, and your firm approves (manually, or automatically against gates you set) before anything is released. Release is a one-time download. A decline or lapse produces a no-release letter. The requester pays a $2 + GST service charge per request; your firm pays nothing.
Agreement PDF generation
Generate the reliance agreement from the registry data, so the paperwork stays consistent and tied to the partner record instead of a Word file on a shared drive.
Periodic review automation
A scheduled job checks review dates daily and shows them on the compliance calendar with escalating reminders, so a periodic review does not slip unnoticed.
Agreement expiry tracking
A second job flags agreements approaching renewal, so reliance does not lapse unnoticed between agreement versions. An agreement also expires automatically if its annual review is more than 30 days overdue.
Reliance linked to the engagement
When an engagement relies on a partner's CDD, the partner reference is recorded on the engagement and carried into the evidence pack, so the reliance can be defended later.
Partner changes reach linked engagements
A change in a reliance partner's status feeds customer baseline drift detection, so it reaches every engagement that relies on that partner. Choose Apply, Rebind or Upgrade, with a rationale.
AML/CTF Act sections 37A, 37B and 38
- s37A: reliance on another party's CDD under a written agreement or arrangement
- s38: case-by-case reliance, with no s37A arrangement in place, where it is appropriate to the risk (Rules 6-31)
- The other party must be a reporting entity or a regulated foreign equivalent (Rules 6-29, 6-31)
- s37B: assess a written arrangement at least every 2 years, and on a significant change, and record each assessment (Rules 6-30)
- s37 is the agency rule: an agent can collect and verify KYC information on your behalf, and you stay liable
Related features
Other parts of the compliance workflow this connects to.
Customer and Engagement Workflow
Engagements record the reliance partner, and the reference carries into evidence packs.
See details →AML/CTF Program
Your program documents the firm's approach to third-party reliance.
See details →Compliance Calendar
Scheduled jobs watch reliance review and agreement expiry dates.
See details →Reliance you can defend in audit
Registry, agreements, reviews and expiry dates on one record per partner.