Solicitors’ body warns on new British register
The Law Society of England and Wales has warned solicitors to exercise caution as a new register of overseas entities (ROE) is launched in Britain on Monday (1 August).
The ROE has been brought in as part of the Economic Crime (Transparency and Enforcement) Act 2022, and introduces new responsibilities and risks into some property transactions.
The representative body has issued guidance to help solicitors after identifying risks, particularly in relation to the verification of overseas entities.
‘Significant concerns’
Law Society president I Stephanie Boyce (pictured) said that the body had long supported the British government’s ambition to improve transparency of ownership – including the introduction of the register.
She added, however, that the body had “significant concerns” about the expectations that might 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,” Boyce warned.
‘Different process’
“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,” she stated.
The solicitors’ body anticipates that many legal practices will conclude that they are unable or unwilling to conduct ROE verification.
It says that this may arise for several reasons:
- A lack of availability of appropriately experienced and jurisdictionally competent advisers
- A lack of knowledge of the structure and nature of the ownership,
- An absence of availability of reliable and independent sources of information, and
- If verifiers feel they cannot provide a statement that facts are true, complete and accurate.