On 26 June 2017 The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (more commonly referred to as the Money Laundering Regulations 2017) came into force in the UK. These regulations supersede the Money Laundering Regulations 2007 and subsequent amendments. Business ‘Sales’/Business Transfer agents are defined as carrying out Estate Agency work and have an obligation to carry out customer due diligence (CDD) on vendors.
The Money Laundering Regulations 2017 Regulations 27, 28, 30 and 31
Customer due diligence
27.—(1) A relevant person must apply customer due diligence measures if the person—
(a) establishes a business relationship;
(b) carries out an occasional transaction that amounts to a transfer of funds within the meaning of Article 3.9 of the funds transfer regulation exceeding 1,000 euros;
Customer due diligence measures
28.—(1) This regulation applies when a relevant person is required by regulation 27 to apply customer due diligence measures.
(2) The relevant person must—
(a) identify the customer unless the identity of that customer is known to, and has been verified by, the relevant person;
(b) verify the customer’s identity unless the customer’s identity has already been verified by the relevant person; and
(c) assess, and where appropriate obtain information on, the purpose and intended nature of the business relationship or occasional transaction.
(3) Where the customer is a body corporate—
(a) the relevant person must obtain and verify—
(i) the name of the body corporate;
(ii) its company number or other registration number;
(iii) the address of its registered office, and if different, its principal place of business;
(4) Subject to paragraph (5), where the customer is beneficially owned by another person, the relevant person must—
(a) identify the beneficial owner;
(b) 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; and
(c) if the beneficial owner is a legal person, trust, company, foundation or similar legal arrangement take reasonable measures to understand the ownership and control structure of that legal person, trust, company, foundation or similar legal arrangement.
(5) Paragraphs (3)(b) and (4) do not apply where the customer is a company which is listed on a regulated market.
(6) If the customer is a body corporate, and paragraph (7) applies, the relevant person may treat the senior person in that body corporate responsible for managing it as its beneficial owner.
(7) This paragraph applies if (and only if) the relevant person has exhausted all possible means of identifying the beneficial owner of the body corporate and—
(a) has not succeeded in doing so, or
(b) is not satisfied that the individual identified is in fact the beneficial owner.
(8) If paragraph (7) applies, the relevant person must keep records in writing of all the actions it has taken to identify the beneficial owner of the body corporate.
(9) Relevant persons do not satisfy their requirements under paragraph (4) by relying solely on the information—
(a) contained in—
(i) the register of people with significant control kept by a company under section 790M of the Companies Act 2006 (duty to keep register)
(ii) the register of people with significant control kept by a limited liability partnership under section 790M of the Companies Act 2006 as modified by regulation 31E of the Limited Liability Partnerships (Application of Companies Act 2006) Regulations 2009
(b); or …
(10) Where a person (“A”) purports to act on behalf of the customer, the relevant person must—
(a) verify that A is authorised to act on the customer’s behalf;
(b) identify A; and
(c) verify A’s identity on the basis of documents or information in either case obtained from a reliable source which is independent of both A and the customer.
Timing of verification
30.—(1) This regulation applies when a relevant person is required to take any measures under regulation 27, 28 or 29.
(2) Subject to paragraph (3) or (4), a relevant person must comply with the requirement to verify the identity of the customer, any person purporting to act on behalf of the customer and any beneficial owner of the customer before the establishment of a business relationship or the carrying out of the transaction.
(3) Provided that the verification is completed as soon as practicable after contact is first established, the verification of the customer, any person purporting to act on behalf of the customer and the customer’s beneficial owner, may be completed during the establishment of a business relationship if—
(a) this is necessary not to interrupt the normal conduct of business; and
(b) there is little risk of money laundering and terrorist financing.
Requirement to cease transactions etc
31.—(1) Where, in relation to any customer, a relevant person is unable to apply customer due diligence measures as required by regulation 28, that person—
(a) must not carry out any transaction through a bank account with the customer or on behalf of the customer;
(b) must not establish a business relationship or carry out a transaction with the customer otherwise than through a bank account;
(c) must terminate any existing business relationship with the customer;
(d) must consider whether the relevant person is required to make a disclosure (or to make further disclosure) by—
(i) Part 3 of the Terrorism Act 2000(a); or
(ii) Part 7 of the Proceeds of Crime Act 2002(b).
(2) Paragraph (1)(a) does not prevent money deposited in an account being repaid to the person who deposited it,