Money Laundering

Question 1

Money laundering is

Answer 1

any activity in relation to the proceeds of crime, even passive activity such as mere possession.

Question 2

Terrorist financing is

Answer 2

the raising, moving, storing and using of financial resources for the purposes of terrorism.

Question 3

It is the duty of

Answer 3

every barrister to understand the principles of money laundering and terrorist financing and how to recognise them.

Question 4

Every barrister owes an obligation

Answer 4

not to become involved in conduct that involves money laundering or terrorist financing.

Question 5

is “ordinary conduct of litigation” count?

Answer 5

“ordinary conduct of litigation” does not count, which will mean that most of the things that you do as a barrister will not trigger anti-money laundering or counter-terrorist financing obligations. However, you should be alert to circumstances that may take litigation out of the “ordinary” and note that the “ordinary conduct of litigation” exception does not apply to activities performed outside a litigation or arbitration context.

Question 6

Who has additional obligations?

Answer 6

Barristers who advise on financial or real property transactions or who provide tax advice have additional obligations under the Regulation

Question 7

Barristers who advise on financial or real property transactions or who provide

tax advice have additional obligations under the Regulations

what are they?

Answer 7

• undertake Customer Due Diligence before acting, to keep a record of their compliance with the Regulations
• make disclosure of suspicious activity to the authorities.
• You will need to be able to determine whether the service that you are providing to your client is subject to the Regulations.

Question 8

You must act :

Answer 8

in compliance with the anti-money laundering and counterterrorist financing requirements of the Bar Standards Board (the BSB) and the BSB Handbook.

Question 9

The law is in many respects broadly drafted and the consequences of failing to

comply with these obligations are

Answer 9

potentially severe, including criminal penalties of

up to 14 years’ imprisonment.

Question 10

The money laundering offences are:

Answer 10

1. Concealing, disguising, converting or transferring the proceeds of crime or removing the proceeds of crime from the jurisdiction (s.327);
2. 10.2. Entering into or becoming concerned in an arrangement that facilitates the acquisition, retention, use or control of criminal property (s.328);
3. 10.3. The acquisition, use and possession of criminal property (s.329); and
4. 10.4. Making an unauthorised disclosure or taking an action or causing an action to be taken that that is likely to prejudice an investigation (s.342).

Question 11

Terrorism Act 11. The terrorist financing offences are:

Answer 11

11. 1. Fund-raising for terrorism (s.15);
12. 2. Use or possession of property for terrorism (s.16);
13. 3. Entering into or becoming concerned in an arrangement that makes property available for the purposes of terrorism (s.17);
14. 4. Entering into or becoming concerned in an arrangement that facilitates the retention or control of terrorist property (s.18); and
15. 5. Failing to disclose a suspicion obtained in the course of a trade, profession or business of the commission of a terrorist financing offence (s.19).

Question 12

What happens with LPP and the provisions?

Answer 12

do not override a client’s Legal Professional

Privilege. You must not make any form of disclosure to the authorities of information

protected by Legal Professional Privilege.

Question 13

When does LPP not apply?

Answer 13

Legal Professional Privilege does not protect communications made in

furtherance of a crime.

Question 14

When are you within the scope of the Regulations?

Answer 14

1. As an independent legal professional when participating in financial or real property transactions, and
2. The “financial or real property transactions” concern:
   
   1. the buying and selling of real property or business entities;
   2. the managing of client money, securities or other assets;
   3. the opening or management of bank, savings or securities accounts;
   4. the organisation of contributions necessary for the creation operation or management of companies; or
   5. the creation, operation or management of trusts, companies,foundations or similar structures, and
3. You are participating in the transaction by
   
   1. a. assisting in the planning or execution of the transaction or
   2. b. otherwise acting for or on behalf of a client in the transaction

You are within the scope of the Regulations.

Question 15

What is the second reasons you are within scope of regulation?

Answer 15

acting as a tax advisor in relation to the provision of tax advice, then

you are within the scope of the Regulations.

18. If the work that you are undertaking is not transactional and not providing tax

advice then you are not subject to the Regulations.

Question 16

What are your obligations if yu fall under the Regulations?

Answer 16

1. You must have in place policies, controls and procedures that address the risk of money laundering or terrorist financing in your practice.
2. You must carry out a risk assessment in relation to work within the scope of the Regulations.
3. You must undertake Customer Due Diligence.
4. You must keep a record of the Customer Due Diligence that you carry out.
5. You must monitor your relationship with your customer.

Question 17

How to Address those Obligations

Answer 17

You must take a risk-based approach to the above obligations: the measures

that you take must be sufficient to meet the perceived level of risk.

Therefore, you need to know how to assess and determine the existence and

level of the risk of money laundering or terrorist financing.

Question 18

Potential indicators of money laundering or terrorist financing activity will

come in a variety of forms but may include:

Answer 18

1. the lay client being based in a high-risk country or region,
2. the nature of the business operated by the lay client,
3. the source of funds involved in the transaction or
4. the personal circumstances of the lay client or someone involved in your instructions.

Question 19

You need to be able to consider the different

Answer 19

risk factors, assess any indicators

of suspected criminal activity and decide what steps you need to take to mitigate those

risks.

Question 20

Enhanced Due Diligence

28. There may be circumstances where the risk of money laundering or terrorist

financing is such that you may need or will be obliged to apply an enhanced level of

Customer Due Diligence, for example

Answer 20

1. where the lay client is based in or operating from a country that is known to present such a risk or
2. is a Politically Exposed Person. In those circumstances you will need to apply greater due diligence to mitigate the increased level of risk.

Question 21

Reliance

29. Where you act upon the instructions of a professional client such as a solicitor

you may be able to rely on their Customer Due Diligence. However

Answer 21

if you do, you

remain legally responsible for those checks and thus for any failings in them.

Other Obligations Under the Regulations

Question 22

Where you are undertaking work that falls within the scope of the Regulations

you may commit a criminal offence if:

Answer 22

1. you suspect that money laundering is taking place and you fail to make the required disclose to the authorities (s.330), or
2. you make an unauthorised disclosure of your suspicion of money laundering or of your knowledge of a money laundering investigation to another person (aka “tipping-off”) (s.333A).

Question 23

How to make disclosure/ where to

Answer 23

Where you are required to make a disclosure of suspected money laundering

or money laundering this must be done by way of making a Suspicious Activity Report

to the NCA. Such reports should be made electronically via the NCA’s website.

Question 24

Public and Licensed Access

33. Where you undertake public access work the requirements of the Regulations

fall upon you directly, e.g. the Customer Due Diligence obligations. If you are

instructed on a licensed access basis by a suitable professional on behalf of a lay client,

you may

Answer 24

be able to rely on due diligence checks carried out by that professional, but

will otherwise be in a similar position to those acting on a public access basis.

Question 25

For money laundering what are the 3 phases to money laundering?:

Answer 25

Placement

layering

integration

Question 26

What is placing?

Answer 26

in the form of giving you the money and articulating the concern

Question 27

What is layering

Answer 27

through transactions overseas and via you

Question 28

what is integration?

Answer 28

by getting you (a legitimate person) to transfer the money

Question 29

Da Silva

Answer 29

suspicion is definite as a “possibility, which is more than faciful that the relevant facts exist. A vague feeling of unease owuld not suffice”.