To learn as much as possible about the legal owners of a UK entity. Where the UK company is a subsidiary of another company we need to determine, for each company, the persons who are the ultimate beneficial owners and the persons who have operational control. We usually undertake this process as part of our setup when undertaking a new client.
Why do we do this?
The financial services industry in UK has been subject to vigorous Anti-Money Laundering Requirements (AMLR) since the introduction of the First Money Laundering Directive in 1991 as revised and codified in The Money Laundering Regulations 2007.
We are required to carry out these checks – they are not optional.
What is involved?
We need to carry out Know Your Client checks which include:-
Details of the nature of business.
An organigram showing the ownership structure so that the ultimate beneficial owners can be identified. We need to know names of persons holding 5% or more of the shares and we will need further evidence for shareholders with a holding of more than 25%. We may need to ask for independent confirmation of shareholdings.
We need to know the names of the persons who have operational control, these will include the directors of the UK company and directors of the parent company.
For each UK director and for each beneficial owner with a shareholding of more than 25% we will need to have:
· Photographic Proof of Identity (such as a passport) and
· Evidence of home address (such as a recent utility bill or bank statement)
Where we cannot physically meet these persons we will need notarised copies of these documents instead.
Upon receipt of these documents
Depending on the answers above we may need to ask for further information. Once documents have been received, we then have to carry out electronic searches regarding possible criminal activity.
What do we do with these documents when the checks are completed
They are retained on our permanent file to be provided as evidence that we have carried out the necessary checks, and have considered the risk assessment, as proof of our compliance with legislation.