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HMRC internal manual

Excise Due Diligence Condition guidance

Risks: identity of the business they are trading with

Businesses should be satisfied with the identity and integrity of the businesses they intend trading with. This is necessary to help prevent them inadvertently supplying or buying from illicit markets. It also makes commercial sense to carry out these tests to protect against the risk of dealing in counterfeit or stolen goods.

The level of identity tests necessary will depend on the overall visibility of the business being considered. A business would not be expected to hold personal identity information (such as a bank statement or utility bill) for officials of major UK producers or long established warehouses, but could be expected to obtain this for a new customer with no previous trading footprint or history. Identification material routinely gathered with no regard to specific risk is of limited value and in extreme cases could lead to identity theft or hijack.

The business should react positively to the following identity risks indicators (please note, this list is not definitive):

  • there is a lack of identity information e.g. no address details
  • the company (where appropriate) is not listed in Companies House records
  • there is no general visibility
  • there appears to be another controlling element to the business being traded with which does not appear to have a statutory link to that business
  • only partly completed application or trading forms are returned
  • addresses for businesses trading in high value goods are either short term leased accommodation or residential addresses
  • there is no approval number when one is required, for example, when goods are held under suspension arrangements but the owner is not registered under Warehousekeepers and Owners of Warehoused Goods Regulations 1999.