Money Laundering Regulations | Customer Due Diligence | KANGS Financial Crime Defence Team
In an article posted on this website entitled Money Laundering Regulations | Due Diligence, we focused on the obligations imposed upon ‘a Relevant Person’ and the exercise of ‘Due Diligence’ under The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, (‘the Regulations’).
John Veale of KANGS now outlines the identification and verification due diligence measures which have to be implemented by the Relevant Person.
KANGS has been successfully representing clients in relation to financial misconduct investigations for many years and is rated as one of the best criminal law firms in the country being ‘Top Ranked’ in the leading legal directories, The Legal 500 and Chambers UK.
KANGS has won The Legal 500 award for ‘Criminal & Fraud Law Firm of the Year’ whilst the firm’s founding solicitor, and senior partner, Hamraj Kang has won The Legal 500 award for ‘Individual Criminal & Fraud Solicitor of the Year’.
We are able to assist clients with all stages of any financial criminal investigation or prosecution whether it is being conducted by the police, HMRC, SFO, FCA or another investigating authority.
Our Team can be contacted for immediate advice and assistance as follows:
Due Diligence Measures | KANGS Financial Crime Defence Solicitors
Identification and verification
Regulation 28 sets out the due diligence steps the Relevant Person must take, if required to do so by Regulation 27, explained in our aforementioned previous article, by stating the Relevant Person must:
- identify the customer unless the identity of that customer is known to, and has been verified by, the relevant person;
- verify the customer's identity unless the customer's identity has already been verified by the relevant person; and
- assess, and where appropriate obtain information on, the purpose and intended nature of the business relationship or occasional transaction.
Where the customer is a body corporate the Relevant Person must obtain and verify the name of the body corporate, its company number or other registration number, the address of its registered office and, if different, its principal place of business.
Unless the company is listed on a Regulated Market:
- the Relevant Person must take reasonable measures to determine and verify, the law to which the body corporate is subject, the full names of the board of directors (or if there is no board, the members of the equivalent management body) and the senior persons responsible for the operations of the body corporate,
- where the customer is a legal person, trust, company, foundation or similar legal arrangement the Relevant Person must take reasonable measures to understand the ownership and control structure of that legal person, trust, company, foundation or similar legal arrangement,
- where the customer is beneficially owned by another person, the Relevant Person must identify the beneficial owner, take reasonable measures to verify the identity of the beneficial owner so that the Relevant Person is satisfied that it knows who the beneficial owner is,
- where the beneficial owner is a legal person, trust, company, foundation or similar legal arrangement, the Relevant Person must take reasonable measures to understand the ownership and control structure of that legal person, trust, company, foundation or similar legal arrangement.
If the customer is a body corporate, and the Relevant Person has exhausted all possible means of identifying its beneficial owner, the Relevant Person may treat its senior person, responsible for managing it, as its beneficial owner.
Where a person purports to act on behalf of the customer, the Relevant Person must verify that person is so authorised, identify that person and verify their identity on the basis of documents or information obtained from a reliable source which is independent of both that person and the customer.
Further Due Diligence Considerations | Kangs Due Diligence Litigation Solicitors
- The Relevant Person must conduct ongoing monitoring of a business relationship, by scrutiny of transactions undertaken throughout the course of the relationship to ensure that the transactions are consistent with the relevant person's knowledge of the customer, the customer's business and risk profile, this includes a continuing review of the source of funds.
- Existing records, maintenance and keeping of documents or information obtained for the purpose of applying customer due diligence measures up-to-date must be constantly reviewed.
- Obtaining due diligence/ongoing due diligence in a manner that reflects the assessment of risk in any transaction, which may differ from case to case, is of high importance.
- There are circumstances when the Relevant Person does not have to continue due diligence measures where to do so would result in the commission of an offence under, for example, the Terrorism Act 2000 or the Proceeds of Crime Act 2002.
How Can We Help? | Kangs HMRC Litigation Defence Solicitors
The Team at KANGS is nationally recognised for its experience gained from many years defending clients facing allegations of financial misconduct of every nature and also guiding and supporting them through financial investigations conducted by HMRC and other prosecuting bodies
If you need help in relation to any such investigation or prosecution or need assistance in relation to any due diligence procedures of the nature referred to above, please do not hesitate to contact our Team through any of the following who will be delighted to hear from you.
We welcome enquiries by:
Telephone: 0333 370 4333