Money laundering Flashcards
Which officers must law firms appoint in relation to money laundering?
Money laundering reporting officer (MLRO): receives reports on suspicions
Money laundering compliance officer (MLCO): SRA’s point of contact on laundering
Which officer must every firm have related to money laundering?
MLRO (nominated officer)
When should client due diligence be carried out?
As soon as possible after 1st contact, and before the business relationship starts (or any transaction is made)
When can client due diligence be carried out after the business relationship started?
- little risk of laundering/terrorism,
- it’s necessary not to interrupt normal business, and
- identity is verified as soon as possible
Which identity documents are required for standard client due diligence?
1 government document showing name and address/name and date of birth, OR
1 government document showing name, and 1 supporting document showing name and address/name and date of birth
How should a company’s existence be verified? What extra information is needed if the company is unlisted?
- name,
- company number, and
- registered office and principal place of business
If unlisted, also:
- constitution, and
- names of directors
When must a “beneficial owner” be identified?
If the client is an unlisted company, partnership (except LLP), or a trust
Who is the beneficial owner of a company?
- anyone with ultimate control over management,
- anyone ultimately controlling over 25% of shares or voting rights,
- anyone controlling the company
Who is the beneficial owner of a partnership?
- anyone with an over 25% share of capital profits or voting rights,
- anyone with control over management
Who is the beneficial owner of a trust?
- settlor,
- trustees,
- beneficiaries (or class in whose interest the trust was set up)
- anyone with control over the trust (adding/removing trustees or beneficiaries)
When is simplified due diligence used?
Low risk of laundering (eg. listed company)
Who is a politically exposed person (PEP)?
- heads of state and ministers
- Parliament members
- members of top courts
- members of central banks/courts of auditors
- ambassadors and top army members
- members of management of state-owned bodies
AND: their close relatives and associates
How long must copies of documents used for due diligence be kept?
5 years from when the business relationship ends
What is a defence to firm’s strict liability for failing to prevent tax evasion by its employees/associated persons?
It had reasonable preventative procedures in place, or it was reasonable not to have them
What must a firm do to act for someone that’s a designated person under the sanctions regime?
Get an OFSI or individual licence to act for reasonable fees
