On 18th July, CMS Cameron McKenna Nabarro Olswang published an article about a recent Scottish case that, it says, provides clarification in relation to whether a regulated entity, or its nominee, must withdraw from a transaction where it is unable to satisfy itself under AML provisions.  A property bought at auction was subject to a contract which required KYC information to be provided to the vendor within a set time limit.  The seller was entitled to deem that the deposit had not been paid until it had received the information, and such non-payment would void the contract.  The Inner House (the court of appeal) disagreed with the court of first instance that the AML regulations applied to the transaction, and that for this reason also, the seller was not obliged to proceed.  The buyer had provided copies of the buyer’s passport and driving licence duly certified by a solicitor as true copies.  The buyer had complied with the seller’s requirement for KYC information, but then the seller had requested further information – about the source of funds, which the buyer’s solicitors said it might not be possible to provide, so the seller did not proceed with the sale. In these circumstances, the court said, proceeding with this transaction would not have amounted to a breach of the AML regulations and therefore be illegal; and the contract did not force the seller to act unlawfully and the court was not requiring it to do so.


Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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