ECSH33385 - Checking customer due diligence: requirement to report discrepancies in registers and obligations on corporate bodies and trustees

Regulation 30A of The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017) requires supervised businesses to disclose any discrepancies to beneficial owners shown in registers. The business must obtain proof of registration or an excerpt of the register of the company, unregistered company, limited liability partnership, eligible Scottish partnership or trust, or an overseas entity, relating to persons of significant control (PSC) as per the PSC registers and may be obtained from the customer, Companies House, or a third party provider.

You can find more information in the relevant requirements section, see ECSH63485 and from paragraph 5.3.129A of the Joint Money Laundering Steering Group (JMLSG) guidance.

This regulation was brought into force on 10 January 2020 and updated on 1 April 2023 to include specific details about the information that required reporting. You must ensure you are referring to the version of MLR 2017 in force during the relevant period you are testing.

You should first establish if the business has a business relationship, see ECSH33311 (note, this requirement doesn’t apply to occasional transactions) with any of the 6 types of company described in paragraph 1. Trusts and overseas entities were only brought into scope on 1 April 2023 so you can only expect a business to have included these from this date.  

As part of its customer due diligence (CDD) measures under regulation 28, a business must take appropriate steps to establish beneficial owners (BOs) . Under regulation 30A, the business must collect an excerpt from the register, for example, from Companies House [) showing who the PSC are. If there are discrepancies in this information, the business is obliged to report it Companies House as the registrar, who must take action to correct the discrepancy.

Similarly, HMRC holds the register for trusts, and businesses can ask HMRC to provide information in limited circumstances  – see guidance on GOV.UK for information on when this may be appropriate.

For more information regarding the Trust Registration Service (TRS) and discrepancy reporting, see the TRS manual in the Manuals Hub.

Discrepancies

The discrepancies the business should be checking for are listed under schedule 3AZA including details such as name, date of birth, and correspondence address.

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You need to understand if, and how, the business is meeting its requirements to report discrepancies. Remember, this is only relevant if the business is in a business relationship with its customer who is one of the entities listed in regulation 30A.

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Breaches

To establish if the business has breached this regulation, you need to understand if the business believes there is a discrepancy but hasn’t reported it. The only exception to reporting discrepancies is where the information may be subject to legal professional privilege.

Customer obligations

You should be aware that customers of supervised businesses, where they are a corporate body which is not listed on a regulated market or trustee, are obliged to provide this information and notify the business of changes to the information. You should read regulation 43 and ECSH 63770 and regulation 44 and ECSH 63775.

You should establish:

  • is the business aware of this obligation?
  • does the business notify its relevant customer(s) of this obligation?
  • is the customer notifying the business of changes?
  • does this occur within 14 days from the date on which it became aware of the change?

If the business is not aware of this, you should explain that knowing there is an obligation on the corporate body or trustee supports it in carrying out its due diligence measures.

You should check whether the business has identified any instances where there has been a discrepancy which the customer did not tell it about.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)