I ended the relationship with a client, what do I do now?

This query is made to us frequently, in relation to how long and what documents should be kept after ending the relationship with a client, or if they have lost contact with the client and therefore have decided to terminate the business relationship.

Article 29 of Law 23 of April 27, 2015, subrogated by Law 70 of 2019, establishes the following:

“Updating of records and their protection. The financial reporting entities, the non-financial reporting entities and activities carried out by professionals subject to supervision must keep updated all the records of the information and documentation of due diligence that is carried out for the identification and verification of the natural person and the final beneficiary of  legal persons or other legal arrangements.

In the cases of those clients identified as high risk, based on the results of the risk assessment carried out by the financial reporting entities, the non-financial reporting entities and activities carried out by professionals subject to supervision, the updating of all the records of the information and due diligence documentation must be performed at least once a year.

Likewise, they will safeguard the information, documentation of the due diligence of the client and the final beneficiary, as well as the records of the operations carried out, for a minimum period of five years, counted from the termination of the professional relationship, which makes it  possible to know the aforementioned details and the reconstruct its operations”.

As seen above, you must safeguard all documentation related to the client for a minimum period of five years counted  from the end of the business relationship, which should be documented through a note by the person responsible for compliance . Through this mechanism, you will be able to demonstrate to the supervisory authority, from when and why it was decided to end said business relationship.

Additionally, this article establishes that the due diligence information must be updated, and in the case of high-risk clients, said update must be carried out at least once a year, and may even be shorter, in accordance with the parameters established in its own risk methodology and compliance manual.

It is very important that the information is updated in your files, so that if, the supervisory body asks for it, the information is complete and in perfect shape, ready to be delivered if it were requested. Similarly, it is important that, if the business relationship has ended, you keep all the records for the minimum period of five years indicated by the Law.