What responsibility do we have as accountants in relation to the money laundering regulations when advising a client to form their company through a formation agent?
It is probably worth considering what the The Money Laundering Regulations 2007, (“MLR”) in relation to forming a company requires: Under section 3(7) and section 3(10) of the MLR external accountants and those forming companies are required to carry MLR check on their clients.
What are MLR checks – “identifying your customer and verifying the customer’s identity on the basis of documents, data or information obtained from a reliable and independent source”.
There are over a hundred formation agents and most will not carry out MLR checks on their clients. So they are in breach of MLR. As accountants do we have a duty to ensure when referring a client to a formation agent that we refer them to one that does comply.
As a chartered accountant I would say that we have a duty to only refer formation agents that comply with MLR. To do otherwise exposes ourselves, our clients and our professional body.
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We form the company ourselves online
We use online formation services and do all of the MLR checks ourselves. Our clients don't directly form the companies, as we submit the data based on our new client set up which includes complying with MLR.