This business is required under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (‘the Regulations’), to put appropriate systems and controls in place, designed to safeguard the business against becoming involved in money laundering or terrorist financing.
Client Due Diligence (CDD)
CDD must be conducted on all clients who retain the business’ services that are regulated under the Regulations.
Regulated services are those in which Solicitors participate in financial or real property transactions concerning:
- Buying and selling of real property or business entities;
- Managing of client money, securities or other assets;
- Opening or management of bank, savings or securities accounts;
- Organisation of contributions necessary for the creation, operation or management of companies;
- Creation, operation or management of trusts, companies or similar structures.
- Participate means assisting in the planning or execution of the transaction or otherwise acting for or on behalf of a client in the transaction.
When is CDD Required?
CDD must be conducted for all clients, including existing clients whose identities have not been checked before or within the last three years.
CDD must also be conducted on beneficial owners of companies, trusts or other entities. Beneficial owners are broadly the individual who ultimately has control over the management of the entity or an individual who owns or controls (directly or indirectly) more than 25% of the shares or voting rights in the entity.
CDD for clients (and where appropriate beneficial owners) must be conducted before we commence any work on behalf of a client, unless, it is necessary to start work to avoid disruption to the normal conduct of business and there is little risk of money laundering.
We are required under the Regulations to Conduct ongoing monitoring of a business relationship on a risk-sensitive basis. Ongoing monitoring means:
- Scrutinising transactions undertaken throughout the course of the retainer (i.e. source of funds), to ensure that the transactions remain consistent with our knowledge of a client and the risk profile;
- Keeping documents or information obtained for the purposes of conducting CDD up-to-date.
Source of Funds
We obtain information about how transactions are going to be funded and the origin of funds. The level of information obtained is on a risk-sensitive basis.
Cash payments from clients will only be accepted for sums up to £500.00.
The business’ client account must only be used to hold client money where there is a genuine underlying legal transaction or some other valid reason for the client’s money to be held.
We are required to maintain records of CDD i.e. copies of evidence obtained to satisfy ourselves of the client’s identity, and the source of funds for transactional work. All of our files are retained for a minimum period of six years.
For the purpose of protecting the personal data of our clients, all such data obtained for the purpose of complying with the Regulations, may only be used for the purpose of preventing money laundering or terrorist financing.
We are professionally and legally obliged to keep your affairs confidential. However, Solicitors may be required by statute to make a disclosure to the National Crime Agency (NCA) where they know or suspect that a transaction may involve money laundering or terrorist financing. If we make a disclosure in relation to your matter, we may not be able to tell you that a disclosure has been made. We may have to stop working on your matter for a period of time and may not be able to tell you why.
If a mortgage lender is involved, we will also act on their behalf. We have a duty to fully reveal to your lender all relevant facts about the purchase and mortgage which includes any differences between your application and information we receive, and any cash back or discounts offered by the seller.
We expect to receive instructions from your lenders to act on their behalf. If so, we will have to pass the information you give us that might be relevant to their decision whether to finance the purchase. If you tell us things that you do not want the lenders to know and they are relevant to the lenders, we may have to stop acting for the lenders and possibly also for you.
We will decide to stop acting for you only with good reason and on giving you reasonable notice.