The Law Society's anti-money laundering helpline is a confidential telephone service for solicitors.
Our team of solicitors answer questions on a wide variety of subjects, including anti-money laundering, costs, conveyancing, client care and complaints handling.
The service operates from Monday to Friday between 9am and 5pm and you can call us on 020 7320 9544.
Below is a selection of questions and answers compiled by the service.
I act for a client who is remortgaging in order to consolidate two existing charges on her property. While carrying out customer due diligence (CDD), I have noticed that there is a discrepancy in the way her first name is spelt in the office copy entries as against her passport and bank statement.
Should I be concerned about this?
In this context, Regulation 28 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 requires that you identify the client and verify their identity on the basis of documents, data, or information obtained from a reliable and independent source.
The purpose of obtaining CDD documents and meeting the client is to satisfy yourself that the client is who she says she is.
To allay any concerns, you should seek an explanation from the client as to why there is a discrepancy in the spelling of her name.
Document this on your file and seek evidence of the correct spelling to further verify the client’s identity. This should assist you in deciding whether you are satisfied about the client’s identity.
If you consider this to be a material issue, you will need to disclose it to the lender in addition to following any specific identification requirements the lender may have.
For further information, please see the Legal Sector Group’s anti-money laundering guidance for the legal sector.
I am the firm’s money laundering reporting officer and would like to know whether or not we should keep our customer due diligence (CDD) papers separate from the client’s main file of papers.
It is not mandatory to hold CDD material separately from the client file for each retainer, but you should consider doing so as it may be needed by different practice groups in your firm, cross-referencing the main file appropriately.
Depending on the size and sophistication of your firm's record storage procedures, you may wish to:
- scan the verification material and hold it electronically
- take photocopies of the CDD material and hold it in hard copy with a statement that the original has been seen
- accept certified copies of CDD material and hold them in hard copy
- keep electronic copies or hard copies of the results of any electronic verification checks, and/or
- record reference details of the CDD material seen.
Any records of suspicions and disclosures should be kept on a separate file to ensure that they are not inappropriately disclosed to the client or third parties in order to avoid committing the offences of tipping off and prejudicing an investigation.
For further information, please see Chapter 3 of the anti-money laundering guidance for the legal sector.
I am due to complete the sale of a residential property to a buyer who is legally represented. However, the buyer has personally transferred the balance of the purchase funds directly to my firm's client account rather than to his own solicitor. I think the buyer’s solicitor gave him my client account details.
What are the issues that I need to consider?
You should ask the buyer’s solicitor how and why your client account details were released to his client.
You should also ask the buyer’s solicitor to make appropriate enquiries about the source of the funds which his client has transferred to your client account and to report to you on the outcome of those enquiries.
If this is not forthcoming or if you are not satisfied, consider whether more information is required and/or whether or not you have grounds for suspicion in relation to the source of those funds, as this is unusual.
For further information, please see the anti-money laundering guidance for the legal sector.
While every effort has been made to ensure the accuracy of the information in this article, it does not constitute legal advice and cannot be relied upon as such.
The Law Society does not accept any responsibility for liabilities arising as a result of reliance upon the information given.
This article is compiled by the Law Society's Practice Advice Service. Comments relating to the questions should be sent by email to firstname.lastname@example.org.