Chapter 8 - Money Laundering Flashcards
Stages of the money laundering process
Placement - first stage of money laundering is moving money into a Latinate financial system. This may be paying it into a bank account or into an offshore account. Placement is the stage where it is most likely that the laundered money will he detected
Layering - the second stage of money laundering is to create a complex web of transactions to move the money around the financial system by layering financial transactions. This then obscures the audit trail and conceals the original source and ownership of the illegal funds
Integration - the final stage of money laundering is to integrate the illegal funds back into the legitimate financial system. Criminals may do this by investing in property and other assets. Integration will be done carefully so that the drinks create a plausible explanation for where the money has come from.
Anti money laundering legislation in the uk
The proceeds of crime act 2002
The terrorism act 2000
The money laundering and terririst financing regulations 2020
National crime agency
The NCA tackles serious organised crime that affects the uk and its citizens
The accountants duty to report money laundering
The proceeds or crime act 2002 and the terrorism act 2000 require accountants to report any suspicion that a client, employer or colleague is involved with criminal property to the national crime agency (NCA) in a suspicious activity report (SAR).
Terrorist financing
This is the provision or collection of funds from legitimate or illegitimate sources with the intention that they should be used in order to carry out any act of terrorism. Like money laundering the maximum penalty for this offence is an unlimited fine or up to 14 years in prison
Required disclosure
There are two circumstances where a required disclosure in an internal report must be made by an accountant:
When the accountant wishes to provide services to a client in relation to property which is suspected to relate to money laundering
When the accountant actually knows or suspects that another person is money laundering
Protected and authorised disclosure
Protected - accountant submits a report providing a required disclosure of a suspicion of money laundering laundering
Authorised disclosure - any person who realised they may have engaged in money laundering should make an authorised disclosure. This may then provide them with a defence again charges of money laundering
Money laundering offices
Concealing - converting criminal property
Arrangement - arrangement of criminal property
Acquisition - possession of crimes property
Failure to disclose
This offence carries a maximum penalty of five years imprisonment and/ or a fine
Tipping off
This is where an accountant who knows that a report of money laundering has been made and warns the persons suspected.
Customer due diligence
This consists of performing back ground checkers and investigating potential or existing customers to ensure they’re not involved in illegal activity.
