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Money Laundering

Money Laundering

One of clients has a Japanese listed company as a shareholder, with shareholding above 25%. What kind of company checks would you do for money laundering purposes? Because it is a listed company, would there be simplified search done? Is it sufficient to have a letter from that company confirming they are a shareholder? Thanks. 


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25th Feb 2013 22:00

Beneficial owner

The essence of the money laundering check on your client, in relation to beneficial owners, is "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".  (Reg 5(b) MLR 2007)

So if you are able to confirm (i) that the listed company owns more than 25% of the client company, (ii) that the listed company genuinely exists  and (iii) that the Japanese listed company does not itself have any beneficial owners, then, in my view at least, you have done what you need.

The letter which you suggest plus some sort of search at the Japanese equivalent of Companies House will get you a long way.  Ideally if the Japanese company publish an English language copy of their annual accounts that may confirm that the Japanese company has no beneficial owners.


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26th Feb 2013 09:45

Makes it sound so simple

In my experience, getting any kind of confirmation from foreign companies is very difficult, even if you know exactly what you are looking for. I would suggest that publicly available information on Japanese companies will be very limited.

Listed Companies tend to have opaque group structures and use specialised vehicles for their investments.

The Japanese company likely instructed a UK legal firm to execute the paperwork. You can propbably find out who this was by buying the CH reports and looking at the presenter information. If this is the case, you could try piggy backing  on their AML.



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