Anti Money Laundering Flashcards
What is Money Laundering?
When proceeds of criminal activities are disguised or converted and then realised as legitimate assets
What regulations is Money Laundering governed by?
The Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017
What are the key provisions of the Money Laundering Regulations?
- Requirement to have a written money laundering and terrorist financing risk assessment
- Implement procedures to address money laundering
- Adopt appropriate internal controls
- Provide staff training
- Comply with due diligence requirements
- Comply with requirements relating to politically exposed persons (PEPs)
- Ensure appropriate record keeping
- AML checks to be made on purchaser and method of purchasing
- Include ‘high risk’ factors when assessing the need for enhanced DD and seek additional information
What are Estate Agents Legal Obligations on Money Laundering?
- Must register with HMRC if letting properties for more than €10,000
- Customer DD on all purchasers, landlords and tenants
- Enhanced DD on if red flags occur
What policies must firms have to identify in transactions?
- Complex or unusually large
- Unusual patterns of transactions
- Are without apparent or legal purpose
What are the two levels of Due Diligence checks?
- Customer Due Diligence (CDD)
- Enhanced Due Diligence (EDD)
What is required for Customer Due Diligence (CDD)?
- ID (Passport or Drivers License) and Proof of Address (Bank Statement, water bill)
- Check the individual on Companies House
- The company’s name, company number and registered address
- The names of the Directors (unless a PLC)
- Their purpose and intended nature of the business
What is required for Enhanced Due Diligence (CDD)?
- Additional information if dealing with someone in a ‘high risk country’ or a politically exposed person
- A more detailed examination of their intended use
What is a PEP?
A Politically Exposed Person
Someone who has been entrusted with a prominent public function
What are the risks of dealing with a PEP?
Potential involvement in bribery and corruption due to their position and influence they may hold
How would you AML check a Private Individual?
ID and Proof of Address
E.g Valid passport and bank statement
How would you AML check a Public Limited Company (Plc)?
London Stock Exchange listing
How would you AML check a Private Limited Company?
Check Companies House
Certificate of Incorporation
Name, company number, registered office address, names, any shareholders details with over 25%
How would you AML check a public body?
Government ownership / control
What are some potential money laundering “Red Flags”?
- Reluctance to provide information
- Inconsistent customer profiles
- Unusual transactions e.g large sums and unexpected urgency
- Payments made in unusual currencies
What would you do if you suspected money laundering?
Report it to the MLRO or risk management and compliance team to investigate further
What is the Professional Standard for Money Laundering?
Countering bribery, corruption, money laundering and terrorist financing, 2019
What is set out in RICS Professional Standard: Countering bribery, corruption, money laundering and terrorist financing, 2019
Sets out three parts:
- Mandatory requirements
- Guidance
- Supplementary guidance
