Money laundering Flashcards
Who is responsible for ensuring a firm takes steps to comply with MLR/PoCA?
COLP and COFA and managers
What must all firms keep in relation to AML?
AML written record of steps taken to identify/assess risks
What are the money laundering warning signs?
- Instructions outside area of expertise
- Unusual retainers
- Uce of client accounts
- Setting up trust
- Property purchase
What are the countries on the Financial Action Task Force list?
- North Korea
- Iran
- Myanmar
What are the countries on the European Commission list?
- Afghanistan
- Barbados
- Cambodia
- Cayman Islands
- Haiti
- Syria
- Uganda
- Vanuatu
- Yemen
- Congo
- South Sudan
- Trinidad and Tobago
- Tanzania
- Philippines
- Iran
- North Korea
What is the direct involvement offence?
- Concealing, disguising, converting or transferring criminal property
- Entering arrangement which you know/suspect facilitates acquisition/retention/control of criminal property
- Acquiring/using/possessing criminal property
What is the defence to direct involvement?
Authorised disclosure
What is authorised disclosure?
to a constable, customs officer or nominated officer
a) Before prohibited act
b) During prohibited act + didn’t know/suspect + own initiative + as soon as practical
c) After prohibited act + good reason for failure to disclose before + own initiative + as soon as practical
What is included in the regulated sector?
Participating in financial and real property transactions
What are the non-direct involvement offences that the regulated sector is subject to?
Failure to disclose
Tipping off
What is the failure to disclose offence?
- Know/suspect someone is laundering proceeds of crime and
- Receive information in course of business in regulated sector and
- Can identify person who is laundering/whereabouts/information that may assist identifying
After making a disclosure to the MLRO, how long must you wait before taking further action?
o Authorised by NCA
o NCA has not refused authority + seven working days passed
o NCA refused consent + 31 days passed since refusal
What are the penalties for breaching money laundering rules?
- Direct involvement offences = 6 months (summary)/ 14 years (indictment) or fine
- Non-direct involvement offences = 6 months (summary)/5 years (indictment) or fine
What is required for standard due dilligence?
a) Identify customer and verify identity
b) Where company – name, company number and RO/principal place of business
c) Identify beneficial owner
d) Ongoing monitoring of business relationship
When will enhanced due dilligence be needed?
- higher risk of ML or a PEP
- provided false/stolen ID or info
- Transaction is complex, unusually large or unusual pattern/no apparent economic or legal purpose
- By nature presents a higher risk
What is required for enhanced due dilligence?
a) Examine background and purpose
b) Increase degree/nature of monitoring
c) Additional, independent reliable sources to verify
d) Additional measures to understand background and financial situation of customer
e) Steps to ensure transaction consistent with purpose and intended nature
When can ID be verified not before a business relationship is established?
- Delay necessary to not interrupt normal conduct of business
- Little risk
Which classes of people can you rely on the CDD they carried out?
- Credit/financial institution
- Auditors
- Insolvency practitioners
- External accountants/tax advisers
- Independent legal professionals
What is required to rely on CDD carried out by another?
- Second solicitor must obtain info to satisfy MLR
- Second solicitor must enter into written agreement with first which
a. Enables them to obtain copies of ID/data/docs from third party immediately on request
b. Requires third party to retain copies of data/docs for specified period
What information is needed for CDD on partnerships?
- Name
- Registered address
- Trading address
- Name of business
What information is needed for CDD on private companies?
- Name
- Company number/registration number
- Address of registered office and principal place of business
- Identity of beneficial owner
- Also determine and verify:
o Law subject to and constitution
o Full names of board of directors and senior persons
