Identity check - overseas parent of subsidiary

Identity check - overseas parent of subsidiary

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I'm being engaged to do some work for a UK company which is a 100% subsidiary of a privately-owned (by 2 individuals) US company. I'm happy with the checks for the UK company but does anyone know please what I need to obtain and put on file in respect of the US parent? It's not high risk as about 40% of its work is done for US government departments so I think they should have checked it out! Sometimes I wish the JMLSG would be a bit prescriptive.

Thank you
Saucy, Worcestershire

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By Jennifer Paul
06th May 2008 11:02

It isn't very easy....
Just posting for other readers' info.

I went to the ICAEW Money Laundering helpline. They just told me to write to the beneficial owners of the US company asking them to confirm they are the beneficial owners. I told them this isn't any kind of evidence.

I then went direct to the ICAEW Library. They looked on the Orbis database and printed off a report for me which says that 100% of stock is owned by the officers, and lists the officers. I guess this is the best I can do.

I can't be the only person who's ever had to do this!

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By User deleted
29th Apr 2008 11:24

Late morning after too many bloody marys....
David

Can you suggest where I could get a company search that might show me the ownership of a private US company? I see you're in the MLR line yourself so you may know. My internet search has only found articles in Forbes etc saying the shares are owned by the 2 founders, who are very rich so it worries me there could be trusts etc,

DG - you are correct to raise PII. Not only does my PII cover it, I am very careful to scope out all US aspects in engagement letters and all subsequent communications. Belt and braces!

Thanks

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By User deleted
28th Apr 2008 18:13

Not so fast!
Don't forget to ensure that your PII covers this work. My own insurance specifically excludes anything with a US connection. If I want to include such a client, I need to pay a much higher premium.

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David Winch
By David Winch
28th Apr 2008 17:01

Reg 5 MLR 2007

Saucy

Have a careful read of Reg 5 of MLR 2007. The relevant bit refers to

"identifying, where there is a beneficial owner who is not the customer, the beneficial owner and taking adequate measures, on a risk-sensitive basis, to verify his identity so that the relevant person is satisfied that he knows who the beneficial owner is, including, in the case of a legal person, trust or similar legal arrangement, measures to understand the ownership and control structure of the person, trust or arrangement".

So you have to know who the holding company is and the ownership and control structure of the holding company.

So a company search of your UK client will reveal that it is a wholly owned subsidiary of the US company. A company search on the US company will confirm its existence and tell you (hopefully) who owns the shares in it and who its directors are.

Job done! Fix yourself a bloody Mary.

David
www.MLROsupport.co.uk

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