As regulated professionals we have a legal and professional obligation to confirm and verify the identity of our clients. We are required to assess, and where appropriate obtain information on, the purpose and intended nature of the business relationship or transaction we are undertaking.
Bates Wells conducts client due diligence enquiries on each new client and persons connected with them. To do this we use a number of methods, including using external service providers which review publicly available information on companies and individuals which may contain credit information. This is not a credit check.
We are committed to knowing who our clients are and to taking appropriate steps to verify their identity to ensure we take a proactive and proportionate approach to identifying and reporting suspected money laundering activities.
We apply a basic standard of due diligence to all of our clients with enhanced requirements as assessed in accordance with the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 as amended from time to time (the ‘Regulations’). The Regulations contain comprehensive requirements regarding client identification, record keeping and mandatory reporting. These requirements are also embedded in our client inception procedures.
We have certain procedures to follow when we first act for you as a client which require us to confirm certain information about you, your organisation, the owners/beneficiaries of your organisation and people within your organisation who hold positions of control. The Regulations also require us to review and update this information at regular periods of time to ensure the information we hold is correct.
Why do we ask for information?
Our procedures ensure we are clear about who we are advising and who is authorised to provide us with instructions. They are also designed to assist in combatting the global threat posed by international money laundering and terrorist financing. Our regulators also monitor our adherence to these obligations.
When do we ask for this information?
We ask for this information when we first establish a relationship with a client. We are also obliged to review and update this information at regular periods of time to ensure the information we hold is correct.
How do we obtain the information we need?
We are required to identify the organisation and those individuals who hold senior positions within an organisation, such as directors or trustees, who have operational responsibility for an organisation and, from time to time, request evidence of the identity of other connected parties. When acting for a company or other organisations we also need to identify and verify the identity of the individual providing us with instructions and may request evidence that the individual has the necessary authority to instruct us.
This is primarily achieved by obtaining information about how an organisation is structured (e.g. company, unincorporated association, trust, partnership) and undertaking electronic searches which provide us with further information about the ownership and management structure. We then confirm with the client that this information is correct. For some organisations we will need to see constitutional documents such as a trust deed or company incorporation documents.
For individuals (and certain personnel within your organisation e.g. directors, trustees, our main contact, shareholders) we ask for the person’s full name, address and date of birth. We then confirm their identity through online verification providers.
Many other firms may request certified copies of personal ID documents. We sometimes require this information due to the nature of the work we are undertaking, if the individual is based in an international jurisdiction or if we are unable to verify through our online search providers.
Politically Exposed Persons
We are required to identify and verity the identity of a Politically Exposed Person (‘PEP’) and to establish their source of funds and source of wealth information. PEPs are natural persons who are or have been entrusted with prominent public functions in the last 12 months. Immediate family members or persons known to be close associates of PEPs are also deemed to be PEPs.
Client due diligence
Depending on the legal nature and structure of an organisation, out client due diligence information requests will vary.
Individuals may be asked to provide evidence of their identity and address. Types of evidence we may request includes: name, date of birth and residential addresses for individuals, employees who are instructing us, trustees, directors or other people related to your organisation.
We may ask for copies or certified copies of identification documents, memorandum and articles of association, trust deeds, constitution documentation, utility bills, etc.
If you or your organisation is based outside of the UK it is likely that we will need to ask you to provide certified documentary evidence of your identity and address. This may include: one or more documents evidencing your photographic identity and one or more documents confirming your proof of address, dated within last three months and certified by an international firm of lawyers or accountants.
Source of Funds
Depending on the nature of the work we are undertaking for you we may ask for documentary information to evidence the source of any funds being transferred and how those funds were accrued.
Types of evidence we may request include: copies or certified copies of bank statements, payslips, evidence of the sale of shares or assets, audited accounts, management accounts, letter from a bank or a financial advisor, etc. Information you provide will be held in strict confidence and used for verification purposes only.
If you do not provide satisfactory evidence or information within a reasonable time, we may not be able to act for you or be required to cease acting on your behalf.
Solicitors are under a professional and legal obligation to keep clients’ affairs confidential. This obligation is subject to certain statutory exceptions. Legislation on money laundering and financing terrorism has placed solicitors under a positive obligation to notify the National Crime Agency if, for example, we have suspicions of money laundering activities. In certain circumstances this obligation may override our duty of confidentiality.
We may not be able to tell you that we have made such a report, nor may we tell you the reasons for it or do anything which could prejudice any money laundering or other investigation that is being or is about to be conducted. If we were to do so we would ourselves be committing a criminal offence. In such circumstances, we may have to delay or stop acting for you in the matter.