Solicitors and estate and letting agents are being warned to exercise caution after the register of overseas entities (ROE) launched earlier this week as part of the Economic Crime (Transparency and Enforcement) Act 2022.
Stephanie Boyce, Law Society president, says: “We have long supported UK government’s overarching ambition to improve transparency of ownership, including the introduction of the register.
“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.
“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.”
Propertymark says estate agents and letting agents supervised by HMRC under the Money Laundering Regulations will be classed as a ‘relevant person’ to verify information.
Other relevant persons can be either an auditor, insolvency practitioner, external accountant, and tax adviser; independent legal professional; or trust or company service provider.
If required to do so estate and lettings agents must complete verification checks on the information that the overseas entity intends to provide to Companies House.
What agents can do
If required to verify information estate and letting agents need to request an agent assurance code from Companies House.
Agents only need to request one code for the whole organisation.
This confirms that the agent has the authorisation to file verification checks statements for an overseas entity.
Estate and letting agents must complete verification checks on all beneficial owners and managing officers of an overseas entity before it can be registered.