Money Laundering & Company Formations

Money Laundering & Company Formations

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I would really appreciate some clarity on the issue of ML regulations for ltd company formation agents.

It was my understanding that the new rules regarding ML were extended to include company formation agents. From looking a few agents online I can see that some do now require original hard copies of utility bills ect and copies of passports with a declaration signed by a solicitor/accountant. However, there are still agents who make no mention of the requirement for such documentation (not mentioning any names).

So, does anyone know what the 'official' stand point is?

My reason for asking is that the company I work for is looking into the possibility of offering a Company Formation Service in-house, without the use of an external formation agent.

Thanks.

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By Robert Hurn
05th Jun 2011 13:23

Online ANL Search

it is my understanding that there is no legal requirement to obtain certain documents (i.e. passport), rather the obligation is to satisfy yourself as to the clients ID.  There are a number of online searches available, the two that I ahve used are www.amlsearch.co.uk and www.amlcc.co.uk both offer personal and non-personal searches.  It is likley that the providers that you refer to rely on online ID verification. 

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David Winch
By David Winch
06th Jun 2011 08:08

Company formation agents

Forming a company for a client / customer is an activity within the scope of the Money Laundering Regulations 2007, see Reg 3(1)(e) and 3(10)(a).

However customer due diligence is only required in the circumstances set out in Reg 7(1).  Some of the terms used in Reg 7(1) are defined in Reg 2(1).

In many cases a company formation agent will form a company for a customer without either forming a "business relationship" with the customer or carrying out an "occasional transaction" for the customer (as those terms are defined in Reg 2).

As a result customer due diligence is not required in respect of that customer.

(By the way utility bills are not usually relied upon these days, typically a passport alone will be sufficient ID for an individual.)

David

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