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PCR > 1. MLR > Flashcards

1. MLR Flashcards

1
Q

Two statutes that apply for AML

A

PoCA 2002 + MLR 2017

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2
Q

What two officers does every firm need to work within ambit of MLR

A

MLRO + MLCO

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3
Q

When is no MLRO needed in a firm

A

If sole practitioner

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4
Q

Where does MLCO need to sit

A

On BoD or management body

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5
Q

Can MLCO = MLRO?

A

Yes

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6
Q

What four general positions are responsible for ensuring compliance w/ PoCA and MLR?

A

COLP, COFA, Ps and firm

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7
Q

What does firm need to identify ML

A

Policies and procedures

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8
Q

What is money laundering?

A

Disguising criminal source, converting funds, disguising trail, and launderer retains control

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9
Q

When can S be liable for handling laundered money?

A

If deposited into client account or setting up structure for ML

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10
Q

Can S reveal details of account, or receive deposit of cash w/o knowledge?

A

No - breach of CoC + SRA

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11
Q

Two scenarios when there is a high risk of ML

A

FATF identifies high risk J, or AMLG suggests country w/ corruption/suspicious activity

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12
Q

What part of AMLG refers to ‘suspicious’ activity

A

12

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13
Q

What kinds of activities for clients are generally low risk for ML

A

Personal injury/litigation

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14
Q

Example of two high risk Js

A

DPRK and Iran

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15
Q

What part of PoCA is relevant to ML

A

Part 7

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16
Q

Who does Part 7 PoCA apply to?

A

All solicitors

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17
Q

What is criminal property defined as in PoCA?

A

Resulting from criminal conduct

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18
Q

Who can commit an offence under PoCA?

A

Any person

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19
Q

What is the difference between who can commit offences under PoCA and under MLR

A

Any person can commit under PoCA - only S in certain cases under MLR

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20
Q

Two general kinds of offences under PoCA

A

Direct involvement and non-direct involvement

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21
Q

Where are the three direct involvement offences under PoCA

A

327 - 329

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22
Q

How do the defences work for the direct involvement offences under PoCA

A

Same for all three

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23
Q

What are the defences to direct involvement offences

A

338 disclosure + 335 appropriate consent, no 338 but reasonable excuse, and prohibited act but function of enforcing PoCA

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24
Q

Where is ‘authorised disclosure’ in PoCA

A

338

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25
Q

What is ‘authorised disclosure’ in PoCA

A

To constable/customs officer/NO by alleged offence that property = criminal

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26
Q

Who is ‘NO’ in firms for PoCA 338 disclosure

A

MLRO

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27
Q

How do the conditions for a 338 disclosure change

A

Depending on if made before, during or after

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28
Q

What is a fourth defence to direct involvement offences (in terms of where activity took place)

A

Criminal conduct outside UK and lawful in that J (and not prescribed by SoS)

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29
Q

When do the non-direct involvement offences apply

A

If working in a regulated sector per Schedule 9

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30
Q

What is the ‘regulated sector’ under PoCA

A

Tax advice and real property transactions

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31
Q

What is the non-direct involvement offence

A

Failure to disclosure to NO in ‘regulated sector’ when have info + can identify whereabouts of person/property

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32
Q

When is the original S clear in the regulated sector (non-direct involvement offence)

A

Once disclosed to NO - NO then decides whether to disclose to NCA

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33
Q

If NO discloses to NCA, until when do they have to wait for consent

A

7 working days from disclosure

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34
Q

Why can a client never be told why there is a delay, when carrying out PoCA disclosures

A

333A tipping off offence

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35
Q

What are the penalties for failure to disclose

A

Imprisonment/fine

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36
Q

What types of work are unlikely to be caught by MLR

A

Litigation and employment law

37
Q

What Regulation of MLR requires firm to assess risk of ML

A

18

38
Q

Is risk assessment carried out on the basis of an individual client’s risk?

A

No

39
Q

What does AMLG add to Regulation 18 risk assessment

A

Customer risk factors and high risk service area (para 2)

40
Q

What are customer risk factors under AMLG

A

High turnover of clients, J w/ deficient AML or certain sector

41
Q

What are high risk service areas under AMLG

A

Real property and complex transactions

42
Q

What part of MLR shows when CDD applies

A

27

43
Q

When does CDD apply

A

If relevant person and 1/4 triggers exist

44
Q

What are the four triggers for CDD

A

BR, OT, suspicious, or doubt veracity

45
Q

Part of MLR on what is a ‘relevant person’

A

Regulations 8 + 12

46
Q

Part of MLR on ‘BR’

A

4

47
Q

Part of MLR on ‘OT’

A

3

48
Q

What is an OT for Reg 27 MLR

A

No BR + transfer is more than 1,000 euros/transaction 15,000 euros or more

49
Q

When might you ‘suspect’ ML, so Reg 27 applies

A

AMLG Ch.12 - unusual instructions or FATF list

50
Q

What happens under MLR if new instructions for existing client

A

CDD should already have been done, so continuing O under 28(11)

51
Q

Where is standard CDD under MLR

A

28

52
Q

What does the process of standard CDD depend on

A

Nature of the client

53
Q

What is the process of SCDD if client = individua

A

Identify + verify identity, and assess purpose of BR/OT

54
Q

What is the process of SCDD for company

A

Obtain + verify name, company number, address, law, constitution, BoD and senior persons

55
Q

What happens if company beneficially owned by another (for Reg 28 SCDD)

A

Identify + verify BO

56
Q

How is beneficial owner defined in MLR

A

Any individual exercising ultimate control, or holding over 25% of voting rights

57
Q

When is there no need to seek out law, BoD/senior persons or analysis of BO for company under SCDD?

A

If company is listed

58
Q

What is insufficient to verify company for SCDD

A

To just check PSC reg

59
Q

What happens if all possible means of identifying BO of company for SCDD have been exhausted

A

Treat senior person responsible as BO

60
Q

What is the usual process for monitoring existing clients

A

By annual review

61
Q

What material covers ‘acceptable verification’ for SCDD

A

AMLG para 4.9

62
Q

Examples of acceptable ID for individual

A

Passport, driving licence, G doc

63
Q

Examples of acceptable ID for P, LP and LLP

A

If well-known, name, reg address + nature - if small, identify as individual

64
Q

When is SCDD generally carried out

A

Before under Reg 30

65
Q

When can SCDD be carried out during

A

BR + necessary + ASAP + low risk

66
Q

What part of MLR allow reliance on CDD carried out by 3rd

A

Reg 39

67
Q

What must 3rd be to rely on their CDD under Reg 39

A

Subject to MLR + MLD4, and carrying on business in EEA

68
Q

When can 3rd’s CDD NOT be relied on

A

3rd is high-risk country under MLD4, unless branch/majority owned sub of person established in EEA under MLD4

69
Q

What must the arrangement be between 3rd and firm if relying on 3rd’s CDD

A

Written, w/ firm able to get immediate access to necessary info

70
Q

If relying on 3rd’s CDD, how long must they keep records for

A

5 years

71
Q

Who is liable for failure to apply correct CDD measures if firm relying on 3rd

A

Firm

72
Q

Can law firm apply CDD via agent/provider?

A

Yes, as long as agreement states law firm is liable for any failure

73
Q

Two alternative types of CDD

A

Simplified and enhanced

74
Q

Where is simplified CDD under MLR

A

37

75
Q

When might simplified CDD be applied

A

Low risk J, listed company, or e.g. life insurance policies or ISAs

76
Q

When might firm discontinue with simplified CDD

A

Doubt veracity or suspects ML

77
Q

Where is enhanced CDD under MLR

A

33 - 35

78
Q

What is enhanced CDD

A

Applied in addition to SCDD, including ongoing monitoring

79
Q

When does enhanced CDD apply, per AMLG

A

If any 33(1) risk factor is present

80
Q

When might enhanced CDD be used

A

High-risk J, product/delivery channels, or PEP

81
Q

What covers minimum retention time of records under MLR

A

40

82
Q

Where are the offences under MLR

A

86 - 88, and 92

83
Q

What is the nature of the offence if contravening MLR

A

Criminal offence

84
Q

Reg 87 offence MLR

A

Prejudicing investigation

85
Q

Reg 88 MLR offence

A

Disclosure offences

86
Q

Reg 92 MLR

A

Offence by C/P committed w/ consent of, or lack of control by, officer, means officer is ALSO guilty

87
Q

What Reg MLR requires RP to have appropriate ML policies and procedures

A

19

88
Q

What Reg MLR requires staff to be trained if they are a relevant employee

A

Reg 34

PCR (6 decks)

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