Money Laundering Flashcards
Money laundering warning signs - e.g:
-a seller and buyer with similar names/the same address
-a seller and buyer both from a jurisdiction outside the UK
-‘mistakes’ regarding an overpayment to your client account
-monies arriving from a 3rd party who is not your client
-client asking you to send monies to an unknown 3rd party
-offshore vehicles
-large cash sums
High risk jurisdictions:
FATF:
North Korea
Iran
EU:
Yemen
Iraq
Syria
Afghanistan
Who do direct involvement offences under POCA 2002 apply to?
Apply to everyone, lawyers and otherwise.
Non-direct involvement offences apply to everyone in the ‘regulated sector’ which includes people ‘participating in financial and real property transactions’ concerning:
-e.g. buying and selling real property or business was entities
Lawyers can be convicted of non-direct involvement offences.
What are the direct involvement offences under PoCA?
3 offences:
-s327: concealing, disguising, converting or transferring criminal property or removing criminal property from the UK
-s328: entering into/becoming concerned in an arrangement which you know/suspect facilitates (by whatever means) the acquisition, retention, use or control of criminal property by/on behalf of another person
-s329: acquiring, using or possessing criminal property
What are the main defences to ML?
-making an authorised disclosure to a nominated officer e.g. MLRO
-(conduct occurred outside the UK and was not unlawful in that jurisdiction and is not prescribed by Secretary of State)
What are the non-direct involvement offences?
s330: Failure to disclose to the firm’s nominated officer/National Crime Agency if:
1) you know/suspect that someone is laundering the proceeds of any criminal conduct;
2) you receive the information in the course of business in the regulated sector; and
3) you can identify the person who is laundering the proceeds of criminal conduct OR the whereabouts of the laundered property.
-s333A - two tipping-off offences:
-disclosing a suspicious activity report (SAR)
-disclosing an investigation
Appropriate consent from the NCA - how long do you wait?
If the nominated officer makes a SAR to NCA, you should not undertake any furth r work unless:
-authorised to do so by the NCA; or
-7 working days (notice period) has passed from the SAR to NCA during which time the NCA has not refused authority to proceed; or
-the NCA refused consent during the notice period, and the moratorium period of 31 days has now expired.
What is CDD?
-identify the client
-verify their identity on the basis of documents, data or information from a reliable source
When must you carry out CDD?
-establish a business relationship
-carrying out an occasional transaction over 1000 euros
-suspect ML or terrorist financing
-doubt the veracity/adequacy of ID docs
When must enhanced CDD be carried out?
High risk of ML - indicators:
-involves high risk country
-PEP
-false ID
-transaction is complex, unusually large or transactions with no apparent legal/economic purpose
When might simplified CDD be appropriate?
Low risk of ML.
Customer is a:
-public administration
-publicly owned enterprise
-financial/credit institution
-a company listed on a regulated market e.g. LSE
What are the 3 phases to money laundering??
- Placement - cash generated from crime being placed in the financial system - usually through the opening of a bank account
- Layering - money is obscured by being passed through many complex transactions, multiple jurisdictions
- Integration - investing the funds in legitimate businesses, or other forms of investment
