ECSH33735 - Records testing: records kept overseas

If a business keeps records overseas, you will need to establish why this is necessary, what records are stored, where they are kept and who has access to them. This may be because:

• there is a cross-border business model
• a beneficial owner, officer or manager (BOOM) lives overseas
• there are overseas branches/subsidiaries/head office/related entities/agents in the same group
• the compliance functions are overseas
• the business has a reliance arrangement with an overseas business.

There is no general objection to a business keeping records overseas, but the records must be made available in the UK when required. You may also need to consider whether the lack of access to records means a business is unable to respond fully and rapidly to enquiries from law enforcement agencies, as to whether it has had a business relationship with any person over the past 5 years and the nature of that relationship. This is required under regulation 21(8) of The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.

If the business confirms its records are kept overseas, you should discuss how you will gain access to them considering the type of intervention you are carrying out.

You should also discuss with the business how soon the records can be made available to you. Remember to consider any time differences and the impact this will have on you obtaining the records.