About this form
Form U6 is enhanced due diligence applied to an unrepresented counterparty, used where the risk determination on Form U5 concludes that a higher-risk situation exists. Like Form C on the client side, it requires the Compliance Officer’s prior approval before the relationship is established or continued. It is the least familiar form in the set, because it needs two conditions to coincide — an unrepresented counterparty and an elevated risk conclusion about them specifically.
When you need it
- The risk assessment recorded on Form U5 has concluded that the counterparty presents higher risk.
- A politically exposed person is on the unrepresented side of the transaction.
- Standard counterparty measures have surfaced something that standard measures cannot resolve.
- Screening has returned a possible match on the counterparty or one of their beneficial owners.
How to complete it
- Complete standard counterparty due diligence first — U6 supplements the U-series forms, it does not replace them.
- Record the additional measures actually taken, including any further verification of source of funds or wealth.
- Set out the reasoning that led to the higher-risk conclusion, not merely the conclusion itself.
- Obtain the Compliance Officer’s prior approval before the relationship is established or continued.
- Where the client side is also higher risk, Form C is required as well — the two are separate assessments of separate parties.
Common mistakes
- Completing Form C for the client and assuming it extends to a higher-risk counterparty. It does not.
- Seeking the Compliance Officer’s approval after proceeding rather than before.
- Recording the additional measures in generic terms that would read identically on any file.
- Continuing with a transaction where enhanced due diligence cannot in fact be completed.
- Overlooking U6 entirely because the counterparty is not your client and the risk conclusion sat on their side.
Legal basis
Published by CEA as an annex to the Guide on the Estate Agents (Prevention of Money Laundering and Financing of Terrorism) Regulations 2021. Read the issuer’s guidance.
Questions
- Is U6 needed whenever Form C is?
- Only where an unrepresented counterparty is involved and the higher-risk conclusion applies to them. They are separate assessments on separate parties.
- Who approves it?
- The Compliance Officer, in advance. Enhanced due diligence requires prior approval before the relationship is established or continued.
- When must it be completed?
- All due diligence must be complete BEFORE the client enters into any agreement — before an Option to Purchase is issued or exercised, and before a Tenancy Agreement is signed.