AML UK: AASG AML Alert - Register of Overseas Entities – Verification Work

The Economic Crime (Transparency and Enforcement) Act 2022 created the Register of Overseas Entities (ROE). It requires overseas entities owning UK property to reveal their beneficial owners and to register their entities on a publicly available register.  Information must be verified before an overseas entity makes an application for registration, complies with the updating duty or makes an application for removal. The Register of Overseas Entities (Verification and Provision of Information ) Regulations 2022 (SI 2022/725) set out the details of the verification system. The drafting of the Verification Regulations means that there is a strict liability in place and the accountancy professional body supervisors are concerned that any firm acting as a verifier will face significant challenges and expose itself to significant risk, including possible criminal prosecution, regulatory sanction, and reputational damage. Firms should carefully consider whether they should provide this verification work. The work required for verification under the ROE is not the same as the risk-based approach to client due diligence under Money Laundering Regulations 2017 and firms should familiarise themselves with the differences. The Government has produced further Guidance to assist.