Money Laundering Flashcards
Requirements for nominated officer appointed
Sufficient seniority to enforce their decisions
Authority to make external reports to NCA without reference to another person
The time, capacity and resources to review internal SARs and make external SARs in a timely manner
Requirements for MLRO
Understanding of business, its service lines and its clients
Sufficient seniority to direct the actitvitirs to all members of staff
The authority to ensure the business’s compliance with the regime
The time, capacity and resources to fulfil the role
What things to MLTF risks consider
Clients
Countries or geographic areas in which it operates
It’s products or services
Its transactions/engagements
Its delivery channels
Examples of high risk services
Trust and company services
Legitimising books and records
Payroll services
Insolvency services
Tax advice that leads to a reduction in tax liability
Tax investigations where there might be a criminal element
Investment business
Probate and estate management
Central and local government support schemes I
When should business apply CD procedures
Start of new business relationship
Appropriate points during the lifetime of the relationship
When occasional transaction is to be undertaken
When there is either knowledge or suspicion of MTLF
When there is doubt about reliability of verification docs
If legal duty
If business has duty to exchange information under the common reporting standard
Components of a good CDD
Identifying the client
Verifying the identify of the client
Identifying the BOs
Taking reasonable measures to verify the identity of the BOs
Gathering information on the intended purpose and nature of the business relationship
Stages of CDD
Identification (info gathering)
Risk assessment
Verification (evidence gathering)
What is a material discrepancy
differences in info about people with significant control / the registrable beneficial owners of an overseas entity from what the obliged entity gathers and company’s house
Must only report discrepancy if it can be linked to
- money laundering
- terrorist financing
- concealing details of the customers business
Make a discrepancy report / company updates within 15 working days
How often should business review anti money laundering and counter terrorist financing
Annually
Nominated officer for SAR should have
Sufficient seniority to enforce decisions
Authority to make external reports to NCA without reference to another person and
Time, capacity and resources to review internal SAR and make external SAR in a timely manner
Business appoints member who’s responsible for business compliance to MLTF regieme
Understanding of the business, its service lines and its clients
Sufficient seniority to direct the activities of all members of staff
The authority to ensure the business’s compliance with the regieme and
The time, capacity and resources to fulfil the role
What is suspicion
A state of mind more definite than speculation but falling short of evidence based knowledge
A possible feeling of actual apprehension or mistrust
An opinion with some foundation
Failures to disclose, defences and exemptions
Overseas conduct
Problem edge reporting exemption
Didn’t know about suspected MLTF/ didn’t have training
Reasonable excuse defence e.g under threat, law enforcement already aware
What is moratorium period
31 days following refusal of DAML request during which the time the activity for which DAML was sought must cease
Max this period can be extended is 186 days
What to do after applying for a DAML
Activity in question must cease unless and until
DAML has been granted
Notice period has expired
DAML having been refused during the notice period, the moratorium period has now expired
If no refusal then seen as given seven working days following the submission
Key elements of SAR and tax practitioners obligations
Key elements: suspicion, crime and proceeds
Three offences: failure to disclose, tipping off and prejudicing an investigation
Correctly made SAR provided full immunity from any action or breach of confidentiality
NCA may grant DAML against tax practitioner to continue acting for client who is the subject of a assets where ordinarily continuing to act would involve committing a money laundering offence
What’s in training programme
An explanation of the law within the context of the businesses own commercial activities
Requirement to carry out CDD
When to make internal report
Red flags
MLTF related situations
The relevant data protection requirements
When does CDD records need to be kept
CDD, business relationship and occasional transaction must be kept for 5 years from the end of the client relationship
Personal data must be deleted once the official retention period ends
