NatWest Important. You need to complete your review of 'My Business Profile'

[soly20]

Hello everyone,

I have received this email from Natwest: Important. You need to complete your review of 'My Business Profile'.

I am a director of a UK LTD company. I am foreign national living in the UK When the account with Natwest was opened, I was the sole owner of the company. After account opening the 100% shares were sold to our parent company in which is incorporated in Lebanon, so we became a fully owned subsidiary.

When I logged on to My Business Profile, I found they are asking about the ownership structure of the business.

Does anyone have any experience with Natwest allowing Business bank accounts of foreign owned companies with a UK resident director? Is this going to be a problem?

Thanks in advance.

 

[Martin Everson]

soly20 said:
After account opening the 100% shares were sold to our parent company in which is incorporated in Lebanon, so we became a fully owned subsidiary.
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Is the bank aware of this change? When you say Lebanon then banks think Hezbollah financing sadly so don't take it personally.

Natwest I believe is still 38% owned by the British government as of last year so their risk appetite is zero - especially in current Middle East climate sadly. Does not matter what your activity is btw.

soly20 said:
When I logged on to My Business Profile, I found they are asking about the ownership structure of the business.
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If you did not inform them of changes then the automatic updates sent from UK Companies House, of any registry changes, they receive may have alerted them anyway.

soly20 said:
Is this going to be a problem?
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Yes


P.S Do what they ask but start looking for an EMI now and just hope for the best in meantime.

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Please note my posts should not be taken as financial or tax advice. Please seek professional advice in that respect.

 

[soly20]

Martin Everson said:
Is the bank aware of this change? When you say Lebanon then banks think Hezbollah financing sadly so don't take it personally.

Natwest I believe is still 38% owned by the British government as of last year so their risk appetite is zero - especially in current Middle East climate sadly. Does not matter what your activity is btw.




If you did not inform them of changes then the automatic updates sent from UK Companies House, of any registry changes, they receive may have alerted them anyway.



Yes


P.S Do what they ask but start looking for an EMI now and just hope for the best in meantime.
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Hi Martin. Thank you for your reply.

We've been banking with them for over 2 years and the change in ownership happened around 18 months ago. It did not even cross my mind to inform them about the change since the business was beginning to take off and I was immersed into the sales aspect of it all. We only sell in the UK. We have no international sales whatsoever. All incoming payments are from the UK and non are cash.
I do not believe they sent this request specifically for us.
I guess I will upload the current structure and hope for the best.

 

[Martin Everson]

OK. But its normal practice and would have been mentioned in your agreement with the bank in small print that you must inform them of changes to the corporate structure. This is not even a small change that has taken place but a fundamental change in ownership of the business. This means that they may not have offered you an account if they new this material information of 100% ownership by a Lebanese company in the first place. It also is a breach of the service they offered you by failing to inform them of this fundamental change.

Also....

A UK resident owned + UK Company + UK operations = low risk

A Lebanon owned + UK Company + UK operations = high risk

soly20 said:
I do not believe they sent this request specifically for us.
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If it is indeed an automated periodic KYC check it won't make any difference to the outcome.

Just hope for the best.

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Please note my posts should not be taken as financial or tax advice. Please seek professional advice in that respect.

 

[Sols]

Yes, this is going to be a problem and it's worse because you didn't tell them. As @Martin Everson said, most EU/UK banks think Lebanon = Hezbollah. Which of course is nonsense, but banks are banks.

There's a small chance that they let you keep the account. For example, if you are a Lebanese national and your company has meaningful business ties to Lebanon (import of Lebanese products, for example), it's possible they will accept the change with just a slap on the wrist.

Start looking for alternatives immediately. In this day and age, any company would be wise to have multiple bank/EMI accounts.

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This is the probably the answer to your question.

 

[soly20]

It looks like i need to start making changes to where our customers pay us. We have an EMI that we work with currently. I guess we should move all the money we have with Natwest into the EMI account. If the account has no more money in it, what would the most they can do after I update the information to the new structure?

 

[Sols]

soly20 said:
It looks like i need to start making changes to where our customers pay us. We have an EMI that we work with currently.
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Does that EMI know about the Lebanese shareholder?

soly20 said:
I guess we should move all the money we have with Natwest into the EMI account.
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Depends on the amount and how it relates to your usual transaction profile and economic activities. It might spook NatWest, now that your account is flagged for review. You can probably transfer a portion of it and steer your clients towards that other account for future payments.

soly20 said:
If the account has no more money in it, what would the most they can do after I update the information to the new structure?
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99% of cases where that happens, they just close the account and cite risk appetite or generic terms and conditions.

In the remaining 1%, they might also send a SAR (Suspicious Activity Report) to the NCA (National Crime Agency). They are required to do that if they suspect fraud, money laundering, funding of terrorism, or other crimes. Since Lebanon = Hezbollah to these people, that risk might be slightly higher in your case, if they find anything suspicious about the Lebanese parent company. If a SAR is filed, the NCA will review (which can take years) and pass it on to law enforcement if they believe the report has merits. Most SARs just sit and gather dust, eventually being deleted without action.

I've heard of cases where banks try to sue ex-clients for damages from misleading the bank about ownership/activities. But that's extremely rare. Most banks just want you gone and sever ties smoothly and cleanly.

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This is the probably the answer to your question.

 

[Martin Everson]

@Sols That pretty much sums it up.

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Please note my posts should not be taken as financial or tax advice. Please seek professional advice in that respect.

 

[soly20]

No the EMI does not know, it's the same situation as this. I will try to avoid letting them know or else i will face closure again. I've worked too hard to have all those doors shut and all my work goes down the drain. I have an agreement with the owners to buy the company off them after they've recuperated their investments and some profits. Probably in about 2 years or so.

And i am not worried about any investigation as there is nothing suspicious whatsoever about the parent company.

You are right. I should move the money slowly as i have some time before I need to reply.

 

[Sols]

soly20 said:
No the EMI does not know, it's the same situation as this. I will try to avoid letting them know or else i will face closure again. I've worked too hard to have all those doors shut and all my work goes down the drain. I have an agreement with the owners to buy the company off them after they've recuperated their investments and some profits. Probably in about 2 years or so.
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Have you registered the change of shareholder with the Companies House? If so, you're just one quick API call away from the EMI as well knowing about your new shareholder.

If you're a low-risk customer, you might not be due for KYC renewal until 2”“3 years after account opening, so they might not have run any checks on you lately.

Toggle signature
This is the probably the answer to your question.

 

[soly20]

Sols said:
Have you registered the change of shareholder with the Companies House? If so, you're just one quick API call away from the EMI as well knowing about your new shareholder.

If you're a low-risk customer, you might not be due for KYC renewal until 2”“3 years after account opening, so they might not have run any checks on you lately.
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Yes, very low risk. All transfers from reputable well know institutions. No cash transaction whatsoever. So i guess I need to keep praying until i get the chance to buy out the parent company.