Money Laundering

Question 1

What is the legislation for money laundering?

Answer 1

Money laundering, terrorist financing and transfer of funds regulations 2017

Question 2

What is the purpose of the money laundering, terrorist finance and transfer of funds regulations?

Answer 2

To reduce solicitors being targeted and being at risk of being used by criminals.

To reduce criminals entering into transactions with the intent of binding the origins/destinations of the funds.

Question 3

What is money laundering?

Answer 3

Criminal money is introduced into the financial system.

Money is distanced from this activity by passing it through various parties. The money is then integrated back into the financial system and the criminal is now in possession of laundered money

Question 4

What are internal controls at a law firm to comply with money laundering?

Answer 4

Nominated officer: money laundering reporting officer.

They receive forms within the firm, concerning any instances of suspected money laundering

Nominated officer liaises with the national crime agency if needed.

ALSO, money laundering compliance officer.

Firm is also required to screen relevant employees and to assess skills and knowledge, and ensure training.

Question 5

What is included in the criminal finances act 2017?

Answer 5

Corporate offence of failure to prevent the criminal facilitation of tax evasion.

Question 6

What are the 6 offences which involves the indirect handing of the proceeds of crime?

Answer 6

Arranging
Acquiring
Concealing
Failure to disclose
Failure from nominated officer to disclosue
Tipping off

Question 7

What is arranging?

Answer 7

S 328

Entering an arrangement which a person ins or suspects facilitates the retention, use, or control of proceeds of crime

Directly involved inthe proceeds of crime, knows or SUSPECT, suspicion counts.

14 years imprisonment

Question 8

What is arranging section?

Answer 8

S 328

Question 9

What is acquiring?

Answer 9

Acquire, use or posses the proceeds of crime.

S 329

Crimial property: from criminal conduct. Person knows or suspect s that the property constitutes crime.

ENJOYED the benefit

Question 10

What section is acquiring

Answer 10

S 329

Question 11

What is concealing?

Answer 11

S 327

Concealing, disguising, converting or transfer the proceeds of crime or remove the proceeds of crime from jurisdiction

Main money laundering offence.

Question 12

What section is concealing

Answer 12

S 327

Question 13

What is failure to disclosue?

Answer 13

Failure to disclose information a bout money laundering to the appropriate authorities. If they know or suspect that a person is engaged, and do not make a disclosure as soon as is practicable.

Objective test - reasonable grounds, know or suspect

And, specifically failure on the nominated officers part

S 330 and 331

Question 14

What sections are failure to disclose

Answer 14

330 and 331

Question 15

Waht is tipping off?

Answer 15

Tipping off an individual that an investigation into money laundering is underway

Question 16

What section. Is tipping off?

Answer 16

S 333A

Question 17

What is the defence of s 329?

Answer 17

Adequate consideration defence.

Offence will not be committed if there was adequate consideration for caring.

Question 18

What is the defence for failure to disclose?

Answer 18

Training defence - if the individual does not get the right training, the employee will not commit an. Offence.

Question 19

What are the due diligence requirements within a firm?

Answer 19

Verification of the identity of all clients.

Standard due diligence and simplified and enhanced due diligence must occur

Question 20

What is standard due diligence?

Answer 20

Most clients

Solicitor is obliged to verify the identity of the client, on the basis of documents or information in either case obtained from a reliable source which is independent of the person.

(Passport, license)

ORIGINAL SIGTING ONLY

Question 21

What is simplified due diligence?

Answer 21

Permitted where a firm determines through individual risk assessment, that the busienss relationship or transaction presents LOW risk.

Factors to include: if client is a company listed on the stock exchange, etc.

Question 22

What is enhanced due diligence?

Answer 22

Required where there is something about the arrangement or transaciton that shows high risk.

If identified
If high-risk third country
If false or stolen identification documentation
If politically exposed person or family or associated
Transaction is complex or very large

Question 23

How long must firms keep a record of due diligence?

Answer 23

5 years from when the busienss relationship ends or at the end of the occassional transaction.