AML

Question 1

What is Money Laundering?

Answer 1

How criminals change money and other assets they have obtained through crime into clean money or assets that have no obvious link to their criminal origins, so they appear legal.

In legal terms:

• handling proceeds of crime
• knowingly involved in criminal or terrorist property
• entering into arrangements to facilitate laundering
• investing proceeds of crime

Question 2

What is the main UK legislation covering anti-money laundering?

Answer 2

Money Laundering Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017

Question 3

What are the requirements of anti-money laundering regulations?

Answer 3

• identify and assess risks
• maintain up to date records
• carry out customer due diligence (on buyer + seller)
• CDD must be carried out on entering into business relationship

Question 4

Property auction specific requirements

Answer 4

No business relationship formed until fall of hammer
Procedure requires all potential bidders to be ID’d prior to auction
CDD is to be completed before close of play on the day the hammer falls
If found that enhanced DD is required - can be completed later, in run up to completion

Question 5

Business Relationship definition

Answer 5

Business, professional or commercial relationship between a relevant person and a customer (CDD to be done on seller prior to marketing!)
An estate agent is to be treated as entering into a business relationship with a purchaser (and seller) when purchasers offer is accepted by seller

Question 6

Key AML risks/RED FLAGS

Answer 6

• Lack of face to face contact
• Use of complex opaque company structures
• Use of intermediaries or third party
• Cash purchases
• Reluctance to confirm source of funds or provenance of funds
• Higher risk juristictions

Question 7

Whats included in firms policy + stmt?

Answer 7

States risk sensitive approach and 3Ds (detect, deter and disrupt) ML activities + training + Nominated ML reporting officer + objectives of company in relation to AML + level of DD necessary and when required + Verification of ID + Know your client’s business + Red flags - reassessment where change to risk etc.

Question 8

What are the requirements under the Sanctions and Anti-Money Laundering Act 2018?

Answer 8

• Having policies, controls, and procedures in place
• Conducting due diligence in the form of identity and source of funds checks
• Identifying and assessing risks relating tomoney laundering, terrorist financing, or other threats

Allowed by Act as the British Government can demand, through enacting further regulations, that people engaging in relevant business take applicable steps (as above) because the act is the UKs own sanctions framework whereby it can issue its own sanctions (rather than EU or other) for the purposes of the detection, investigation, and prevention of money laundering and terrorist financing.