Anti-money laundering

Caution warning as register of overseas entities comes into force

Solicitors are being warned to exercise caution as the register of overseas entities (ROE) is launched on Monday 1 August.

The Law Society of England and Wales has issued guidance to assist solicitors after identifying risks, particularly in relation to verification of overseas entities.

The ROE has been introduced as part of the Economic Crime (Transparency and Enforcement) Act 2022.

“We have long supported UK government’s overarching ambition to improve transparency of ownership, including the introduction of the register,” said Law Society president I. Stephanie Boyce.

“However, we have expressed significant concerns as to the expectations which may be placed on solicitors to verify the accuracy of information put onto the register.

“We have prepared this guidance to support members in navigating the verification procedure under the ROE during the opening phase of the regime.

“If solicitors get this wrong they would leave themselves open to criminal prosecution and may be professionally negligent.

“There is a real risk that members may mistakenly interpret what is required for verification under the ROE as being identical to what is required for anti-money laundering compliance client due diligence (CDD). It is not. Verification is a very different process from CDD.

“Solicitors should exercise extreme caution.”

We anticipate that many legal practices will conclude that they are unable or unwilling to conduct ROE verification. This may arise for several reasons, including:

  • the lack of availability of appropriately experienced and jurisdictionally competent advisers, knowledge of the structure and nature of the ownership
  • an absence of availability of reliable and independent sources of information; and
  • if verifiers feel they cannot provide a statement that facts are true, complete and accurate

Notes to editors

Read the guidance on register of overseas entities

In-house solicitors will not be able to do verification as the verifier has to be independent of the organisation they are verifying.

But a solicitor in a non-regulated legal practice, such as a professional services firm, could verify.

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Press office contact: Nick Mayo | 020 8049 4100

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