Court of Session opinion on Anti-Money Laundering – The obligation to cease transactingBack to News Listing
Muhammed Iftikhar -v– CIP Property (AIPT) Limited: This is the first case in UK dealing with the obligation on a regulated entity, or its nominee, to cease a transaction where it is unable to satisfy itself for the purposes of the Anti-Money Laundering Regulations. The pursuer sought specific implement against a nominee of a large financial institution to enforce missives of sale relating to a commercial property. The defender contended that the missives entitled it to resile. However, the defender also contended that, even if it was otherwise contractually obliged to proceed, it would be unlawful for it to do so where it was not satisfied that the transaction was not part of a criminal enterprise and the court should not issue an order requiring it to commit a criminal offence. The pursuer also argued that the regulations did not apply to a nominee company, just to the financial institution itself. The court ruled conclusively that the defender was correct on all points. The judge held that the regulations did apply to a nominee company. Were it otherwise the purpose of anti-money laundering and anti-terror legislation would be frustrated. The court would not force a nominee of a financial institution to proceed if the nominee was dissatisfied, in its sole discretion, with the evidence provided by a purchaser. This case provides important guidance to all regulated entities, including solicitors, banks and other financial institutions on the operation and impact of anti-money laundering and anti-terror legislation on commercial transactions. Gavin Walker QC of Axiom Advocates represented the successful defender.