Money Laundering Flashcards

Question

Who is the beneficial owner of a company?

Answer 1

Any individual who **exercises ultimate control over management** of the company; or Owns or controls **more than 25% of the shares** or voting rights; or Controls the body corporate

Answer 2

Any individual who is entitled to or controls **more than 25%** share of the **capital / profits / voting rights**; or who **otherwise exercises control** over the management

Answer 3

_Each_ of the following: i. The **settlor** ii. The **trustees** iii. The **beneficiaries** iv. *Where individuals benefiting from the trust have not been determined*: the **class of persons in whose main interest** trust is set up v. Any individual who has **control** over the trust

Answer 4

Where a firm determines through an individual risk assessment that the business relationship / transaction presents a **low risk** (should also consider the beneficial owners) Factors to take consider include: whether client is a **listed company**, **where** the client is established & does business (but presence of one of these things does not nec indicate lower risk!) Solicitor must obtain **evidence** that the transaction & client are **eligible** for simplified DD

Answer 5

**a. The client** eg. secretive, obstructive, evasive, criminal associations **b. Funding** Unusual source, eg. large cash payment, unexplained third party, multiple accounts **c. The transaction** Unusual features, eg. loss making, repetitive, no obvious commercial purpose, unexplained urgency, settled too easily/quickly **d. Unusual instructions** eg. outside solicitor's area of expertise, no explanation why firm chosen, willing to pay high fees **e. Geographical concerns** eg. unexplained movement of monies between diff jurisdictions, connection to suspect jurisdictions

Answer 6

*Direct involvement* Arranging Acquisition, use or possession Concealing *Indirect involvement* Failure to disclose Failure to disclose by nominated officer Tipping off Prejudicing an investigation

Answer 7

Offence to **enter into** or become concerned in an **arrangement** which a person knows or suspects **facilitates** (by whatever means) the **acquisition, retention, use or control of the proceeds of crime** _Defences_: * **Authorised disclosure** defence * **Overseas** defence

Answer 8

If the person, who would otherwise be committing an offence, makes a disclosure to a **constable**, **HMRC officer** or **nominated officer** _**Prior** to the act_ * Makes authorised disclosure **as soon as practically possible** prior to the act *and* * **Consent** of the nominated officer or NCA is obtained → NO can't give consent until -NO receives **NCA consent**; -NO **hears nothing for 7 working days** *(starting w// first working day after disclosure)*; *or* -If consent **refused** by NCA if it is **subsequently granted within 31 days** *or* period of **31 days has expired** from the date of refusal _**During** the act_ Made **ASAP after solicitor first knows or suspects** + disclosure is made on their **own initiative** _**After** the act_ Made **ASAP** on solicitor's **own initiative** & there is a **good reason for failure** to disclose prior to completing the act

Answer 9

Where the individual knew, or believed, that the 'criminal conduct' **occurred abroad** & was **lawful in the country where it took place**

Answer 10

Offence to acquire, use or have possession of the proceeds of crime _Defences_ * **Authorised disclosure** defence * **Overseas** defence * **Adequate consideration** defence

Answer 11

If there was **adequate consideration** for acquiring, using or possessing the proceeds of crime (**unless** individual **knew or suspected** that those goods might help carry out criminal conduct)

Answer 12

Offence to conceal, disguise, convert or transfer the proceeds of crime, or remove the proceeds of crime from England, W, S or NI _Defences_ * **Authorised disclosure** defence * **Overseas** defence

Answer 13

A person commits an offence if: (a) **Knows or suspects**, or has reasonable grounds to know or suspect (_objective_) that a person is **engaged in money laundering** *and* (b) The information comes to him **in the course of a business** in the regulated sector *and* (c) The information **may assist in identifying** the money launderer or **location** of laundered property *and* (d) He does **not make a disclosure ASAP** _Defences_ * **Authorised disclosure** defence * **Training** defence (individual didn't suspect, there were reasonable grounds to suspect but employee hadn't received proper training) * **LPP** defence (solicitor not obliged to disclose any info that comes to the solicitor as a **professional legal adviser in privileged circumstances** * **Overseas** defence

Answer 14

Where a **nominated officer knows or suspects** or has reasonable grounds to know or suspect, money laundering as a consequence of their role as nominated officer & **fail to make the necessary disclosure to NCA as soon as practical** _Defence_: **reasonable excuse** for not disclosing

Answer 15

i. **Disclosing a disclosure** If likely to prejudice any investigation ii. **Disclosing an investigation** If likely to prejudice any investigation _Defences_ * If person who made disclosure **did not know or suspect disclosure would prejudice** investigation * If disclosure made by adviser to their client **for the purpose of dissuading**

Answer 16

Offence if know or suspect that a money laundering investigation has, or is about to be, commenced & make a material disclosure to any other person which is likely to prejudice the investigation or interfere with relevant material *Similar to tipping off, but extends to _non-regulated_ individuals*