Q&As

Company A and Company B are co-investors into ProjectCo. Is Company A required/entitled to carry out KYC checks on ProjectCo's directors nominated by Company B, and if so what information can Company A request?

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Published on LexisPSL on 10/04/2017

The following Financial Services Q&A provides comprehensive and up to date legal information covering:

  • Company A and Company B are co-investors into ProjectCo. Is Company A required/entitled to carry out KYC checks on ProjectCo's directors nominated by Company B, and if so what information can Company A request?
  • ‘Relevant persons’ for the purpose of the Money Laundering Regulations 2007 (MLRs)
  • Customer due diligence
  • Enhanced due diligence
  • Anti-money laundering obligations of a company that is not a relevant person

‘Relevant persons’ for the purpose of the Money Laundering Regulations 2007 (MLRs)

The Money Laundering Regulations 2007, SI 2007/2157 (MLRs 2007) apply to the following legal or natural persons acting in the course of business carried on by them in the UK as defined in MLR 2007, SI 2007/2157, reg 3:

  1. credit institutions

  2. financial institutions

  3. auditors, insolvency practitioners, external accountants and tax advisers

  4. independent legal professionals

  5. trust or company service providers

  6. estate agents

  7. high value dealers

  8. casinos

MLR 2007, SI 2007/2157, reg 4 outlines exclusions to the rule and discusses a range of persons and activities. It may also be useful to view Practice Note: The anti-money laundering regime for further insight.

Customer due diligence

As required by MLR 2007, SI 2007/2157, reg 7(1), a relevant person must apply customer due diligence measures (sometimes known as KYC checks) when he:

  1. establishes a business relationship

  2. carries out an occasional transaction

  3. suspects money laundering or terrorist financing

  4. doubts the veracity or adequacy of documents, data or information previously obtained for the purposes of identific

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