Client Due Diligence Documentary Requirements

Deviations

 

Where it is not possible to meet the below requirements the Partner should email the Business Quality Manager (lydia.turner@carbonlawpartners.com) to explain the risk profile of the client, what information or documentation they have been unable to obtain and why. The BQM will then review the information provided and sign off the deviation, if appropriate or recommend what further steps can be taken to mitigate any risks posed by the gap in information. Where further escalation is required this will be made to the MLRO.

 

Individuals

 

Client Type: UK Individual

Requirement

Regular Due Diligence applies unless you have identified high risk circumstances requiring Enhanced Due Diligence.   

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Actions for Regular Due Diligence

Obtain the following details:

  • Full Name

  • Residential Address

  • Date of Birth

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Electronic verification will be completed by the Hub team using Tracesmart. If electronic verification cannot be completed, obtain copies of one document from list A and one document from list B below: -

 

List A

  • current signed passport

  • current photo card driving license

  • birth certificate

 

List B

  • council tax or utility bill

  • bank, building society, mortgage or HMRC tax statement

  • house or motor insurance certificate

  • record of home visit

  • current photo card driving license (if not being used in A)

 

Where documents from list A and B are obtained from a client you have not met face-to-face these must be certified by a lawyer, bank manager, accountant or GP.  

 

 

Client Type: Overseas Individual

Requirement

Regular Due Diligence applies unless you have identified high risk circumstances requiring Enhanced Due Diligence.   

 

If documents are in a foreign language you must be satisfied that they provide evidence of the individual’s identity. If in doubt, the documents should be translated.

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Actions for Regular Due Diligence

Obtain one document from list A and one document from list B below: -

 

List A

  • current signed passport

  • current national identity card

 

List B

  • council tax or utility bill

  • bank, building society, mortgage or HMRC tax statement

  • house or motor insurance certificate

  • official, reputable overseas directory

  • confirmation of address from a regulated person in the relevant jurisdiction

 

Where documents from list A and B are obtained from a client you have not met face-to-face these must be certified by a lawyer, bank manager, accountant or GP.  

 

PEP/Sanctions checks will be completed by the Hub team using Tracesmart. Where any red flags are identified via Tracesmart, the Hub team will contact the Partner to advise.

 

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Client Type: Agent or representative of an individual

(e.g. power of attorney)

Requirement

Regular Due Diligence applies unless you have identified high risk circumstances requiring Enhanced Due Diligence.   

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Actions for Regular Due Diligence

Obtain:

  • Evidence to confirm the individual has the authority to represent the underlying client (for example the document granting power of attorney),

  • Appropriate identification and verification documents for the agent – please follow UK or Overseas Individual guidance above, and

  • Appropriate identification and verification documents for the underlying client – please follow UK or Overseas Individual guidance as appropriate

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Client Type: Professional regulated by The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017

(e.g. lawyer, accountant)

Requirement

Simplified Due Diligence applies unless you have identified circumstances in your risk assessment that mean Regular or Enhanced Due Diligence applies or there is suspicion of money laundering or terrorist financing.

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Actions for Simplified Due Diligence

Obtain:

  • Evidence from their regulator’s directory that they are registered, e.g. print from the Law Society’s online register of solicitors

 

 

Client Type: Politically Exposed Person (PEP)

(including family members and known close associates of a PEP)

Requirement

Where the client is a PEP, or a beneficial owner of a company client is a PEP, you must apply Enhanced Due Diligence.

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Actions for Enhanced Due Diligence

Tracesmart will return an alert if an individual’s name matches a name on their PEP database. These alerts will be reviewed and discounted, where possible, by the Hub team. Where the Hub team cannot discount hits, they will consult with the Partner to determine if the alert is a true PEP match.

 

Where the Tracesmart search has verified the individual, no further verification documents are required. Where the Tracesmart has returned a “Refer” result and has not verified the individual then documents are required as per the UK or Overseas Individuals guidance above.

 

Where the individual is confirmed as a PEP, the following actions must be completed before the file can be opened:

  • Obtain the approval of the MLRO to accept the instructions and act for the PEP,

  • Establish the source of the funds being used for the transaction – consider whether there are signs of corruption or evidence that government or state funds are being used inappropriately,

  • Establish the source of wealth of the PEP – how they have obtained their overall wealth.

 

Once the file has been opened you will need to conduct enhanced on-going monitoring – essentially keeping a closer eye on the matter and transactions undertaken for the PEP.

 

 

Entities

 

For all entity clients it is necessary to establish that the instructing party has the authority to act for the client (usually recognised from understanding their role within the company) and the instructing party must be identified and verified, aside from where Simplified Due Diligence can be applied. To identify and verify the instructing party please follow the UK Individual or Overseas Individual guidance as appropriate.

 

 

Client Type: UK credit or financial institution

Requirement

Simplified Due Diligence applies unless you have identified circumstances in your risk assessment that mean Regular or Enhanced Due Diligence applies or there is suspicion of money laundering or terrorist financing.

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Actions for Simplified Due Diligence

Obtain:

  • Evidence that the client is regulated for the purpose of anti-money laundering, e.g. through a print of their entry on the FCA Register

There is no requirement to obtain information on beneficial owners.

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Client Type: Credit or financial institution in the EEA

Requirement

Simplified Due Diligence applies unless you have identified circumstances in your risk assessment that mean Regular or Enhanced Due Diligence applies or there is suspicion of money laundering or terrorist financing.

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Actions for Simplified Due Diligence

Obtain:

  • Evidence that the client is regulated for the purpose of anti-money laundering, e.g. through a regulator’s directory

There is no requirement to obtain information on beneficial owners.

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Client Type: Credit or financial institution outside the EEA where equivalent AML provisions apply

Requirement

Simplified Due Diligence applies unless you have identified circumstances in your risk assessment that mean Regular or Enhanced Due Diligence applies or there is suspicion of money laundering or terrorist financing.

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Actions for Simplified Due Diligence

Treat as credit or financial institution in the EEA as above.

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Client Type: Credit or financial institution outside the EEA where there are no equivalent AML provisions

Requirement

Regular Due Diligence applies unless you have identified high risk circumstances requiring Enhanced Due Diligence.   

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Actions for Regular Due Diligence

Treat as private unlisted company outside the EEA as below.

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Client Type: Well-known ‘household name’ company or partnership

(i.e. the entity is well-known, reputable, has a long history in its industry and there is substantial public information about them)

Requirement

Simplified Due Diligence applies unless you have identified circumstances in your risk assessment that mean Regular or Enhanced Due Diligence applies or there is suspicion of money laundering or terrorist financing.

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Actions for Simplified Due Diligence

Obtain and record the following information:

  • Name

  • Registered address, if any

  • Trading address, and

  • Nature of the business

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Client Type: UK company listed on a regulated market (often denoted by PLC)

Requirement

Simplified Due Diligence applies unless you have identified circumstances in your risk assessment that mean Regular or Enhanced Due Diligence applies or there is suspicion of money laundering or terrorist financing.

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Actions for Simplified Due Diligence

Obtain:

  • Confirmation of the company’s listing (e.g. a copy of the dated page of the website of the relevant stock exchange, or a photocopy of the listing in a reputable daily newspaper)

 

 

Client Type: Subsidiary of a UK listed company

Requirement

Simplified Due Diligence applies unless you have identified circumstances in your risk assessment that mean Regular or Enhanced Due Diligence applies or there is suspicion of money laundering or terrorist financing.

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Actions for Simplified Due Diligence

Obtain:

  • Evidence that the subsidiary is majority owned by a UK listed company (through ownership documents such as a CS01 or audited accounts)

  • Confirmation of the Parent company’s listing (e.g. a copy of the dated page of the website of the relevant stock exchange, or a photocopy of the listing in a reputable daily newspaper)

 

 

Client Type: UK partnership

Requirement

Regular Due Diligence applies unless you have identified circumstances in your risk assessment that mean Enhanced Due Diligence applies.

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Actions for Regular Due Diligence

  • For smaller partnerships, treat the partners as individuals and obtain the required documentation for each (see UK/Overseas Individuals guidance above)

  • Treat larger partnerships as private unlisted companies (see UK private unlisted company below)

 

 

Client Type: UK partnership made up of regulated individuals (e.g. solicitors, accountants, etc)

Requirement

Simplified Due Diligence applies unless you have identified circumstances in your risk assessment that mean Regular or Enhanced Due Diligence applies or there is suspicion of money laundering or terrorist financing.

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Actions for Simplified Due Diligence

  • Confirm the firm’s existence and trading address from a reputable professional directory or with the relevant professional body (e.g. obtain a printout from the Law Society’s online directory of firms for a solicitor partnership)

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Client Type: UK private unlisted company (often denoted by Ltd) and UK LLP not made up of regulated individuals as above

Requirement

Regular Due Diligence applies unless you have identified high risk circumstances requiring Enhanced Due Diligence.   

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Actions for Regular Due Diligence

Where the client is a corporate body, you must obtain and verify:

  • Registered name;

  • Registered address, and if different, its principal place of business;

  • Company number;

  • The law to which the corporate body is subject; and

  • The full names of the board of directors and senior persons responsible for the operations of the corporate body.

 

The above information will be obtained from the client via the CDD Form, and can be verified against Companies House. The following prints should be obtained from Companies House and recorded on the file:

  • Overview page showing the details of the corporate body,

  • Officers page showing the current board of directors.

   

Beneficial owners 

You must also identify the beneficial owners of the corporate body (any individual holding directly or indirectly more than 25% of ownership or control). This information should be obtained from the client and can be verified via documents obtained from Companies House (latest CS01 showing persons of significant control). Where documents on Companies House indicate different ownership or are out of date you should consider requesting evidence of the most up to date ownership of the corporate body from the client.

 

In order to identify and verify the beneficial owners of the corporate body the UK Individual and Overseas Individual guidance above should be followed.

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Client Type: Private unlisted company in the EEA

Requirement

Regular Due Diligence applies unless you have identified high risk circumstances requiring Enhanced Due Diligence.   

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Actions for Regular Due Diligence

Obtain:

  • Documentation as for UK private unlisted company above

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Client Type: Private unlisted company outside the UK or EEA

Requirement

You must apply Enhanced Due Diligence.

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Actions for Enhanced Due Diligence

Obtain:

  • Documentation as for UK private unlisted company above and require that the documents provided are certified by a lawyer, bank manager, accountant or GP whose identity we can check by reference to a professional directory

 

 

Client Type: Overseas company listed on a regulated market

Requirement

Simplified Due Diligence applies unless you have identified circumstances in your risk assessment that mean Regular or Enhanced Due Diligence applies or there is suspicion of money laundering or terrorist financing.

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Actions for Simplified Due Diligence

  • Record steps taken to establish the status of the listing market

  • Obtain evidence of the listing as for UK listed companies above

 

 

Client Type: Companies with capital in the form of bearer shares

Requirement

You must apply Enhanced Due Diligence.

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Actions for Enhanced Due Diligence

Obtain:

  • Documentation as for UK private unlisted company above

  • The identities of the holders and material beneficial owners of the shares (these should then be verified as per the UK/Overseas Individuals guidance above)

  • An assurance that you will be notified whenever there is a change of holder and/or beneficial owner

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Client Type: UK public authority

Requirement

Simplified Due Diligence applies unless you have identified circumstances in your risk assessment that mean Regular or Enhanced Due Diligence applies or there is suspicion of money laundering or terrorist financing

 

Actions for Simplified Due Diligence

Obtain evidence of the existence of the authority from an official government website

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Client Type: Overseas public authority which:

  • is entrusted with public functions

  • has publicly available, transparent and certain identity

  • has transparent activities and accounting practices, and

  • is accountable to a community institution, the authorities of an EEA state or is otherwise subject to appropriate check and balance procedures

Requirement

Simplified Due Diligence applies unless you have identified circumstances in your risk assessment that mean Regular or Enhanced Due Diligence applies or there is suspicion of money laundering or terrorist financing

 

Actions

Obtain evidence of the existence of the authority from an official government website

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Client Type: Other overseas public authority in non-high risk jurisdiction

Requirement

Regular Due Diligence applies unless you have identified high risk circumstances requiring Enhanced Due Diligence.   

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Actions for Regular Due Diligence

  • Obtain evidence of the existence of the authority from an official government website

 

And obtain and record:

  • full name of the entity

  • its nature and status

  • address

  • name of the home state authority

  • name of the directors or equivalent

 

 

Client Type: Other overseas public authority in high risk jurisdiction

Requirement

You must apply Enhanced Due Diligence.

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Actions for Enhanced Due Diligence

  • Obtain evidence of the existence of the authority from an official government website

 

And obtain and record

  • full name of the entity

  • its nature and status

  • address

  • name of the home state authority

  • name of the directors or equivalent

 

And

  • Consider whether there is a heightened risk of corruption or misappropriation of government monies in your matter, and

  • Conduct a greater level of on-going monitoring

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Client Type: Registered charity

Requirement

Simplified Due Diligence applies unless you have identified circumstances in your risk assessment that mean Regular or Enhanced Due Diligence applies or there is suspicion of money laundering or terrorist financing.

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Actions for Simplified Due Diligence

  • Obtain a printout from the Charity Commission’s website evidencing the client’s registered status.

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Client Type: Small, unknown or obscure or unregistered charity

Requirement

Regular Due Diligence applies unless you have identified high risk circumstances requiring Enhanced Due Diligence.  (e.g. there are financial restrictions placed on the charity).

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Actions for Regular Due Diligence

  • Consider the business structure and conduct appropriate CDD as set out for companies.

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Client Type: Standard risk trust

Requirement

Regular Due Diligence applies unless you have identified circumstances in your risk assessment that mean Enhanced Due Diligence applies.

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Actions for Regular Due Diligence

  • Consider whether the client is the trustee, settlor or beneficiary

  • Obtain documentation as for relevant client category for the client

  • If you are acting for more than one trustee, obtain relevant documentation for at least two trustees

  • Consider beneficial ownership if you are acting for corporate trustees

 

 

Client Type: High risk trust

Requirement

You must apply Enhanced Due Diligence.

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Actions for Enhanced Due Diligence

  • Consider whether the client is the trustee, settlor or beneficiary

  • Obtain documentation as for relevant client category for the client

  • If you are acting for more than one trustee, obtain relevant documentation for at least two trustees

  • Consider beneficial ownership if you are acting for corporate trustees

  • Conduct CDD on all the trustees or the settlor,

  • Make a record of the purpose of the trust and the source of the funds used to create it, and

  • Obtain a copy of the trust deed

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Client Type: Foundation

Requirement

Regular Due Diligence applies unless you have identified high risk circumstances requiring Enhanced Due Diligence.   

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Actions for Regular Due Diligence

  • Consider whether the client is the trustee, settlor or beneficiary

  • Obtain documentation as for relevant client category for the client

  • If you are acting for more than one trustee, obtain relevant documentation for at least two trustees

  • Consider beneficial ownership if you are acting for trustees

 

If the foundation is a charitable institution obtain documentation as for charities:

  • For a registered charity obtain a printout from the Charity Commission’s website evidencing the client’s registered status

  • For a small, unknown or obscure or unregistered charity consider the business structure and conduct appropriate CDD as set out for companies

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Client Type: Deceased person’s estate

Requirement

Regular Due Diligence applies unless you have identified high risk circumstances requiring Enhanced Due Diligence.   

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Actions for Regular Due Diligence

  • Conduct CDD on the executor or administrator as above for individuals. If there is more than one, conduct CDD on at least two

 

And obtain:

  • A copy of the death certificate, and

  • A copy of the grant of probate or letters of administration

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Client Type: Church or place of worship

Requirement

Simplified Due Diligence applies unless you have identified circumstances in your risk assessment that mean Regular or Enhanced Due Diligence applies or there is suspicion of money laundering or terrorist financing

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Actions for Simplified Due Diligence

  • If a registered charity obtain a printout from the Charity Commission’s website evidencing the client’s registered status

  • If not a registered charity obtain and record confirmation from the General Register Office (GRO)

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Client Type: School or college

Requirement

Simplified Due Diligence applies unless you have identified circumstances in your risk assessment that mean Regular or Enhanced Due Diligence applies or there is suspicion of money laundering or terrorist financing

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Actions for Simplified Due Diligence

  • Obtain printout of relevant entry on the Department of Education and Skills’ list of approved educational facilities,

or

  • If registered as a charity, obtain a printout from the Charity Commission’s website evidencing the client’s registered status

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Client Type: Club or association

Requirement

Regular Due Diligence applies unless you have identified high risk circumstances requiring Enhanced Due Diligence.   

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Actions for Regular Due Diligence

Obtain and record:

  • full name

  • legal status

  • purpose

  • registered address

  • names of all office holders

 

Obtain:

  • Articles of association

  • Recent audited accounts

  • Listing in a telephone directory

 

 

Client Type: Employee pension fund

Requirement

Simplified Due Diligence applies unless you have identified circumstances in your risk assessment that mean Regular or Enhanced Due Diligence applies or there is suspicion of money laundering or terrorist financing

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Actions for Simplified Due Diligence

Obtain

  • Evidence that the fund is an employee pension fund e.g. a copy of the page showing the name of the scheme from the most recent deed, or a consolidating deed for the scheme

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Client Type: Other pension fund

Requirement

Regular Due Diligence applies unless you have identified high risk circumstances requiring Enhanced Due Diligence.   

 

Actions for Regular Due Diligence

Obtain

  • CDD as appropriate to the business structure

 

 

 

EEA Countries

  • Austria

  • Belgium

  • Bulgaria

  • Croatia

  • Republic of Cyprus

  • Czech Republic

  • Denmark

  • Estonia

  • Finland

  • France

  • Germany

  • Greece

  • Hungary

  • Ireland

  • Italy

  • Latvia

  • Lithuania

  • Luxembourg

  • Malta

  • Netherlands

  • Poland

  • Portugal

  • Romania

  • Slovakia

  • Slovenia

  • Spain

  • Sweden

  • UK

 

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High Risk Third Countries

  • Afghanistan

  • Bosnia and Herzegovina

  • Guyana

  • Iraq

  • Lao PDR

  • Syria

  • Uganda

  • Vanuatu

  • Yemen

  • Ethiopia

  • Sri Lanka

  • Trinidad and Tobago

  • Tunisia

  • Pakistan

  • Iran

  • Democratic People's Republic of Korea