Accounts, Client Monies, Anti-Money Laundering

Question 1

What is IPReg?

Answer 1

The Intellectual Property Regulation Board

Regulatory body for patent and trademark attorneys

Code of Conduct for Attorneys to follow, takes complaints of professional misconduct, sets training and educational requirements

Has the power to sanction attorneys, warn/fine/remove Attorneys

Question 2

What are the relevant aspects of IPReg’s Code of Conduct?

Answer 2

1. TM and Patent Attorneys must have appropriate controls, procedures and records to ensure clients receive a high standard of service relating to the management of client money
2. Any upfront payment of fees MUST be held in a separate bank account to the firms regular business account
   (Regular business account and dedicated client monies account)
3. Total money held on account for a client must not exceed £250,000
4. TM and Patent Attorneys must comply with all legislation pertaining to money laundering and proceeds of crime

Question 3

What is money laundering?

Answer 3

The crime of moving money that has been obtained illegally through banks and other businesses to make it seem as if money has been obtained legally

In England and Wales it is a criminal offense for someone who has knowledge of/suspicion of money laundering to not report it

Question 4

How can we comply with anti money laundering regulations?

Answer 4

1. Conduct risk assessment and controls
2. Conducting customer due diligence
   (Verify company details at Companies House, check whether client has a website, conduct online search, request ID from director of company and utility bill, ask a mutual third party to vouch for them, conduct credit check etc)
3. Obtaining beneficial ownership information
4. Undertaking monitoring of transactions and business relationships
5. Money laundering training

Question 5

How to conduct risk assessment for individual / private clients?

Answer 5

1. Take steps to identify client and verify their identity by obtaining appropriate documents (passport, driving license)
2. Proof of address (bank statement, utility bill)
3. Best practice for attorney to meet client so that they can take scanned version of the original ID (or a certified copy)

Question 6

How to conduct risk assessment for overseas clients (corporate)?

Answer 6

1. Obtain the registered address of the company
2. Obtain list of directors and company secretaries

Can check company details from overseas company registers

Question 7

How to conduct risk assessment for public liability companies and foreign associates?

Answer 7

For PLC’s refer to the stock exchange that they float on

For foreign associates check the local associates Patent and TM Registers to ensure they are listed there

Question 8

What are the warning signs of money laundering?

Answer 8

1. Check location of client, e.g if a sanctioned country (North Korea, Iran, Syria, Russia)
2. Difficulty getting information about a client / company
3. Receiving inconsistent information
4. Highly complicated group structures
5. Making a payment to you then withdrawing it

Question 9

What is the requirement for record keeping?

Answer 9

Regulated firms should retain records for a minimum of 5 years

These records are - copies of any of the documentation and information obtained by the relevant person to satisfy customer due diligence (e.g ID documents, proof of address etc)
Also records in respect of a transaction

Question 10

What is the benefit of having a deposit account e.g at UKIPO, WIPO?

Answer 10

Makes payment of official fees quicker and easier (particularly when there are short deadlines)