Money Laundering Regulations 2017—CDD and beneficial ownership—law firms
Money Laundering Regulations 2017—CDD and beneficial ownership—law firms

The following Practice Compliance guidance note provides comprehensive and up to date legal information covering:

  • Money Laundering Regulations 2017—CDD and beneficial ownership—law firms
  • What/who is a beneficial owner?
  • Client due diligence requirements
  • Client's obligation to provide beneficial ownership information—corporate bodies and trusts
  • Beneficial ownership registers
  • Identifying and verifying beneficial owners—company or LLP
  • Identifying and verifying beneficial owners—trusts
  • Identifying and verifying beneficial owners—other client types
  • If you cannot establish beneficial ownership
  • Record keeping
  • more

The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017), SI 2017/692, as amended by the Money Laundering and Terrorist Financing (Amendment) Regulations 2019, SI 2019/1511, from 10 January 2020, impose obligations on firms in relation to beneficial owners.

This Practice Note:

  1. explains:

    1. the concept of beneficial ownership

    2. who is categorised as a beneficial owner, and

    3. what is required by way of client due diligence (CDD) measures

  2. covers:

    1. requirements for certain clients to supply information about their beneficial owners, and

    2. what information is available via beneficial ownership registers

  3. provides guidance on:

    1. what use you can/should make of information contained in these registers when conducting CDD

    2. the requirement to report discrepancies in beneficial ownership information, and

    3. SRA approval of beneficial owners, etc

It is intended to provide guidance to law firms when dealing with corporate bodies and trusts and their own SRA obligations in relation to beneficial ownership.

This Practice Note is not intended to be a guide for corporate bodies or trusts on their obligations in relation to their own beneficial ownership information under the MLR 2017.

What/who is a beneficial owner?

The MLR 2017 identify six main categories of entity or arrangement that may have a beneficial owner:

  1. body corporate

  2. partnership

  3. trust

  4. foundation or other legal arrangement similar to a trust

  5. estate of a deceased