Money Laundering and Bribery Flashcards
When are AML checks required to be undertaken?
- If I am appointed as a selling or buying agent, immediately upon confirmation of instruction and updated whenever the situation changes
- On the buyer/vendor, following issue of HoTs,
Who is the Money Laundering Nominated Officer in your company? and what is their role?
Jason Honisett
- review and consider reports of suspicious acitvities
- make reports to National Crime Agency if any suspects arise or if any ML offence has been committed
- Act as the key liason point with NCA and law enforcement agencies
What procedures do companies have to prevent ML?
- Appoint AML management board
- Risk management practices
- Internal controls
- Customer due diligence
- Record keeping
- Monitor and management of compliance through internal comms and policies
- Staff awareness and training
What are the red flag in AML checks?
- complex or unusual large transactions
- unusual patterns of transactions
- transactions involving Politically Exposed Persons (PEPs)
- transaction that involve party from high risk third country
-transactions which have no apparent economic or legal purpose
-any other activity which the relevant person regards as particulary lkley by its nature to be related to ML or terrorist financing - transactions that involve companies or individuals that are on the Gov Consolidation Sanction lists
What are the sanction if a company/individual fails to establish appropriate AML checks?
It’s a criminal offence punishable by up to 2 years in jail, unlimited fine or both
Which organisation supervise AML regulations?
HM Revenue and Customs (HMRC)
Are AML checks all similar for any type of activity?
No, checks are on a risk-base approach; meaning that different levels of checks are undertaken based on the level of risk/the likelihood to launder or fund terrorism
Are firms AML systems required to be tested?
Yes, regular tests on procedures is required by companies and full compliance review is required to be performed annually through an A1 form,
How long are AML CDD required to be kept by a company?
at least 5 years from the end of a transaction or business relationship (whichever is greater)
Can you store ID documents and other info relating to CDD checks in your job file?
No, I would normally send all this data to the AML team to be securely stored for avoiding GDPR breaches
Whose responsibility is to report ML suspicious activities?
All member of staff and it doesn’t matter who is it and how this came up. Any knowledge of suspicion obtained (irrespective of business activity) must be reported to to the ML Nominated Officer who will assess it and eventually report it to the National Crime Agency
Whose responsibility is to report ML suspicious activities and what is the procedure?
All member of staff and it doesn’t matter who is it and how this came up. Any knowledge of suspicion obtained (irrespective of business activity) must be reported to to the ML Nominated Officer who will assess it and eventually report it to the National Crime Agency
How does the Proceed of Crime Act 2002 apply to AML?
This states that by entering or participating even indirectly within a project that I know/suspect facilitates the acquisition or control of criminal property, I commit an offence.
- Accept a payment i cash to avoid tax and VAT
- Being part of a development project which you know has obtained planning permission through the bribing of the planning officer
What are the activities which are regulated by AML checks?
- Freehold acquisition and disposals
- Lettings or lease renewals/regears/assignments that equate to £10,000 or more per months
- Auctions - both client and bidders
- Investment management work
- Anything that leads to involvement in acquisition or disposal, or lease with CV over £120k pa.
What activities are do not require AML checks?
- Property valuations
- Rent reviews
- Property management services
- CPO
Under the ML regs 2017 and 2019, risk assessment should occur at four different levels.. what are these?
- National risk assessment performed by gov
- Risk assessment by the regulators in each industry sector highlighting the greater risk areas (in our case HMRC)
- Risk assessment for the firm taking into account the regulator recommendations and how these apply to the services provided
- Risk assessment for each client
What is the purpose of Customer Due Diligence(CDD)?
It’s to obtain identity information regarding the clientv(counterparty) and satisfy myself that I have full info for going ahead with he transaction.
What info do I need for ID checks do I need for CDD?
- If individual, ID/ passport/ driving licence and copy of bank statement/utility not more than 3 months old for proving address
- make reasonable endeavors to identify beneficial owners (and Person of Significant Control on CH)
- Company number and name of directors unless the company is listed on stock exchange
- Country of residence or registered address
What other info do I need to provide regarding the transaction for CDD?
- Nature of relationship / If my company has previously worked with the person
- Proposed funding
- What is the transaction about?
- Is the transaction consistent with the entity normal business
- Have I met the individual face-to-face
- Do I have any concerns about the entity or anything that want to bring to CDD team attention?
What are EDDs and why should I do these?
Enhanced Due Diligence checks, which are required for any transaction involving a person established in a “high risk third country” or for PEP (or family member). Essentially, these checks require additional evidence and monotoring
Define bribery
A bribe can include offering, promising, giving, demanding or receiving an advantage (i.e. gift, payment, hospitality) in exchange of an action that is illegal, unethical or a breach of trust.
