Chapter 26 AML: An overview of the guidance on money laundering Flashcards
26.2 Purpose of AMLGAS
Money laundering includes all forms of using or possessing criminal property regardless of how it was obtained. Businesses may seek an alternative interpretation of the UK AML regime, but they must be able to justify their decision to their anti-money laundering supervisory authority.
All relevant persons under the 2017 regulations must be supervised by one authority but a relevant person may have more than one authority to supervise them. Registration for supervision is open to sole proprietor members of the association and the firms of tax advisers which comprise at least one member of the association who is a principal within the firm. Anyone not registered is expected to register, any individual not registering will be assumed to be either:
• A principal or employee of a firm registered with the association
• A principal or employee of a firm registered with another authority under the 2017 regulations
• Registered as an individual with another authority under the 2017 regulations
• An employee of a firm not required to be registered under the 2017 regulations
• In practice as a tax adviser outside of the UK
• Not in practice as a tax adviser
If you are carrying on a business in tax and accounting sector you or your firm must be supervised. You will not need to be supervised by a supervisory authority if you:
• Are a fully retired member
• Work entirely outside the UK
• Do not work in the tax and accounting sector
26.2 Purpose of AMLGAS - scheme rules
Scheme Rules
Students of the CIOT/ATT cannot be supervised by the CIOT/ATT, they only supervise members. If you are providing services you must be registered for AML supervision, if you are a student you can register with HMRC, once you pass your exams you can then switch your supervision to the CIOT/ATT. You must apply for AML supervision, the CIOT/ATT don’t do this automatically.
Your firm must comply with the UK AML/CTF legislation, conduct its practice with the laws of the CIOT/ATT and the comply with the AML scheme rules.
A registrant for the AML supervision must disclose a criminal history check, submit an AML annual return, pay the registration and annual retention fee, permit inspection visits, notify the institution if they wish to withdraw or propose to wind up insolvency proceedings.
26.3 AML regime legislation
The UK AML regime is contained in the following legislation:
• The Proceeds of Crime Act 2002, as amended by the serious organised crime and police act 2005
• The terrorism act 2000, as amended by the anti-terrorism, crime and security act 2001 and the terrorism act 2006
• The money laundering, terrorist financing and transfer of funds regulations 2007
• The terrorist asset freezing act 2010
• The counter terrorism act 2008, schedule 7
• The criminal finances act 2017
POCA and TA 2000 contain the offences that can be committed by individuals or organisations. The 2017 regulations set out the systems and controls that businesses are obliged to possess, as well as the related offences that can be committed by businesses and key individuals within them.
26.4 Who AMLGAS is for
The guidance is for anyone who in the course of the business in the UK, acts as an auditor, external accountant, an insolvency practitioner and a tax adviser.
Defined services are activities performed in the course of business by organisations or individuals as auditors, external accountants, insolvency practitioners or tax advisers or as trust and company services providers. It also includes services under the designated professional body provisions.
If you re providing pro bono work (or any work for free) you do not need to be registered for AML supervision.
26.5 Legal status of AMLGAS
This guidance has been approved by HM treasury; the UK courts will take account of its contents when deciding whether a business is subject to it has committed an offence under the 2017 regulations. If an anti-money laundering supervisory authority is called upon to judge whether a business has complied with regulations, it is likely to be influenced by whether or not the business has applied the provisions of this guidance.
26.6 Money Laundering defined
Money laundering if defined widely in UK law. It includes all forms of using or possessing criminal property (as well as facilitating) of criminal property regardless of how it was obtained. Criminal property includes money or money’s worth, securities, a reduction in liability and tangible or intangible property. Money laundering can include the proceedings of offending overseas that would have been an offence in the UK. There is no materiality or de minimis exceptions to money laundering or terrorist financing offences.
Money laundering can include a single act, complex and sophisticated schemes involving multiple parties, multiple methods of handling and transferring criminal property or concealing criminal property or entering into arrangements to assist others to conceal criminal property. Neither the business nor its client needs to have been party to money laundering for a reporting obligation to arise, risks can be posed by clients, suppliers, employees and customers.
Terrorist financing offences – these offences relate to:
• Fundraising – inviting others to provide money or property with the intention that it will be used for the purposes of terrorism
• Using or possessing terrorist funds
• Entering into funding arrangements – deciding which results in money to be made available for the purposes of terrorism
• Money laundering
• Disclosing information related to the commission of an offence
• Failing to make a disclosure in the regulated sector
26.7 The AML legal and regulatory framework
The primary money laundering offences are defined by POCA, as amended by the SOCPA. Someone commits an offence if they:
• Conceal, disguise, convert, transfer or remove criminal property from the UK
• Enter into or become involved in, an arrangement which they know or suspect facilitates the acquisition, retention, use or control of criminal property by or on behalf of another person
• Acquire use or possess criminal property for which adequate consideration was not provided
Any of these offences is punishable by up to 14 years’ imprisonment and/or an unlimited fee. A person does not commit an offence above if:
• They make an authorised disclosure under section 338 and they have the appropriate consent
• They intended to make a disclosure but had a reasonable excuse for not doing so
• The act is done in carrying out a function relating to law enforcement
None of these offences (s327, 328, s329) is committed if:
• The persons involved did not know or suspect they were dealing with the proceeds of crime
• A person of the suspicious activity is made promptly to a money laundering reporting officer MLRO or the National Crime Agency (NCA) and the suspicious activity report is made before the offence takes place
• There is reasonable excuse for not reporting
• The conduct which gave rise to criminal property is reasonably believed to have happened in a located where it was legal and would have carried a maximum sentence of less than 12 months had it occurred in the UK. A specialist legal adviser may be needed for overseas conduct exemption
26.7 The AML legal and regulatory framework
The following offences apply only within the regulated sector:
• Failure to report a suspicion of money laundering
• Disclosing that a SAR has been made, or is being contemplated in a way that is likely to prejudice any subsequent investigation
A person does not commit an offence (s330) for any of the above if:
• He had a reasonable excuse for not disclosing the information or other matter
• He is a professional legal adviser and the information or other matter came to him in privileged circumstances
• He had no actual knowledge of suspicion and has not received any AML training
there are equivalent offences under the terrorism act 2000 with no overseas conduct exemption or de minimums threshold amount.
