Compliance corner: Overseas client, UK property, high value purchase. What should be on the compliance checklist?

Q: Can we act for an Irish company buying a multi-million pound UK property if it is not yet registered on the Register of Overseas Entities?

A: You are right to flag the ROE point, although I would address the broader risk picture in the round. 

A Republic of Ireland company is an “overseas entity” for these purposes, so it will need to register with Companies House and obtain an Overseas Entity ID before it can be registered as proprietor of UK land. Overseas entities wanting to buy, sell or transfer UK property must register and disclose their registrable beneficial owners or (or managing officers in some cases). 

From an AML perspective, I would not treat ROE registration as a substitute for your own due diligence. It is a separate legal requirement and a useful transparency check, but your file still needs to evidence that you have identified and verified the client, understood its ownership and control structure, assessed the matter risk, and satisfied yourself on source of funds and source of wealth. Basically, your core requirements under the Money Laundering Regulations and LSAG.

Practically, I would suggest you obtain and retain: 

• an Irish company registry extract/certificate of incorporation, 
• constitution/articles, 
• confirmation of current directors, 
• a structure chart showing ownership/control up to the ultimate beneficial owners, 
• ID/verification for beneficial owners and anyone exercising control, 
• board authority for the purchase, 
• authority for the individual giving instructions, and 
• evidence explaining the commercial rationale for the purchase. 

For a high value residential purchase through a corporate vehicle, I would expect a properly documented matter risk assessment and a clear audit trail on source of funds and, where appropriate, source of wealth. It is not enough simply to show that money is coming from a regulated bank account; the file should show the economic origin of the funds. 

I would also check sanctions, PEP and adverse media results for the company, directors, beneficial owners and potentially any funders. Ireland is not of itself a high-risk jurisdiction, and the fact the entity is not yet on the ROE is not suspicious if this is its first UK acquisition. However, unexplained urgency, reluctance to provide ownership information, opaque ownership or third-party funding, nominee arrangements, or an unclear reason for using the company as the acquisition vehicle should all prompt enhanced due diligence and MLRO referral.

From a professional ethics perspective, you can act, but only if you remain satisfied that the transaction is lawful, transparent and within your AML risk appetite. The SRA Principles require integrity, independence and acting in the client’s best interests without compromising regulatory obligations. 

Finally, unless your firm is separately registered and comfortable acting as a Companies House verification agent, I would be cautious about verifying the ROE information yourselves. Most firms shy away from this type of work. The client can instruct an appropriate provider (we can do this). It might take a little time to get the registration in place, so build that into your transaction time line.