Other Legislation Flashcards
What is the Consumer Credit Act 2006?
It protects private consumers who enter into certain types of credit agreement. It covers:
- Advertising loans
- Calcaltion of APR
- Early repayment procedures
- Procedures for breaches
- States that agreements must be made in writing
What loans does the CCA 2006 Cover and what’s exempt?
- Loans greater than £25,000
- Exemptions include:
- family arrangements when there is no intention of entering a legal relationship e.g. pocket money
- loans for the purpose of improving/repairing a private residence
What is Money Laundering?
What are the stages?
ML is where proceeds of crime (dirty money) are filtered through the financia; system. The stages are:
- Placement: placing illegal funds in deposits and financial instruments
- Layering: processing illegal funds through multiple transactions
- Integration: converting the funds into seemingly legitimate cash
What legislation governs ML?
- The Proceeds of Crime Act 2002
- The Money Laundering Regulations 2007
What does the Proceeds of Crime Act 2002 (POCA 2002) entail?
POCA 2002 Lays out how ML offences can be committed in relation to:
- pocession and obtainng criminal property
- Assisting money launderers
- Failing to report suspicions
- Tipping off launderers that they’re under investigation
What does the Money Laundering Regulations 2007 entail?
List instances when firms must pay particular attention.
Criminal liability for ML falls on institutions and individuals. Wrt ML, firms are therefore required to:
- Establish internal control and communication procedures
- provide on-goin training for staff and ensure that they are aware of their obligations
- Introduction of Customer Due Dilligence (CDD) - replacing the ‘know your customer’ of the MLR 2003
Particular attention must be given in instances of:
- New customers: check & ratify their identity through appropriate docs
- Changes of name: proper evidence should be given
- Children’s’ accounts: sometimes used to disguise the origin of funds
- Suspicious transactions: where movements on an account are inconsistent with the customer’s profile
- Lump sum investments: where there is no obvious reason for the customer to have such funds
- Frequent but irregular investments from overseas, possibly indicating tax evasion
What is Customer Due Diligence (CDD)?
- Identifying the customer and verifying the customer’s identity on the basis of reliable info
- Identifying where there is a beneficial owner other than the customer, and taking adequate measures on a risk-sensitive basis to verify their identity.
- Obtaining info on the purpose and intended nature of the business relationship
When should CDD be taken?
- Establishing a business relationship
- Carrying out occasional transactions as defined in the regs
- ML or terrorist financing is suspected
- Doubts exists as to the veracity/adequacy of docs, data or info previously obtained to support/verify identification
What is Insider Dealing?
What can be done to mitigate the risk of insider dealing?
Insider dealing is a criminal offence that involves buying and selling of listed shares based on ‘inside knowledge’ not yet available to the public. Those commiting an offence may be:
- Trading based on relevant information - info that’s disclosed within 6 months of insider acting on it
- A connected person - anyone in reciept of the info
- Passing on the info to others
Price sensitive info is any info that when disclosed is likely to have an effect on the share price.
Chinese walls between e.g. consultancies and banks can be used to mitigate the risk
What is the Company Directors Disqualification Act 1986?
How can a director be disqualified?
This act prevents bad directors from taking up similar positions in other companies for up to 15 years. Compulsory DSQ arises from:
- Fraudulent trading: continuing to permit an insolvent company to trade knowing that it is insolvent and that there’ll be inevitable losses
- Breaches in relation to forming, managing or liquidating a company
- When three or more breaches of company legislation have been committed: e.g. failure to file accounts, improper conduct relating to capital and financing and certain failing in respect of duties of a liquidator
What is Bribery?
What are bribery offences according to the Bribery Act 2010?
Birbery is when a person gives or promises to give financial or other advantage to another individual in exchange for improperly performing a relevant function
Offences according to the BA 2010 include:
- Being bribed
- Bribing foreign public officials
- Failing to prevent bribery
- Making facilitation payments
Under the BA 2010, who is responsible for Bribery?
What are the punishments?
As with ML, the org is not responsible if an employee commits a bribery offence if they can prove that they have adequate controls in place to prevent bribery. Unusually for criminal law, this is done on the balance of probability
Punishment includes:
- For summary offences, a max £5000 find and a max 12 months imprisonment
- For indictable offences, unlimited fine and a max 10 years imprisonment
- Confiscation of assets obtained through illegal conduct
What does the Data Protection Act 1998 entail?
- A data subject is the individual on which personal data is held by a company. They have the right to claim compensation if they incur any losses from companies who breach the Act
- They also have rights to access the info
- Data must comply with the 8 principles of data protection
What are the 8 principles of data protection?
- Personal data may not be processed unless the controller complies with the conditions for fair and lawful processing wrt personal and sensitive personal data
- Data must be obtained wrt specific lawful purpose and processed in a manner compatible to that purpose
- Personal data must be adequate, relevant and not excessive
- Personal data must be accurate and up to date
- Personal data mustn’t be retained longer than necessary
- Processing of personal data must be carried out in manner consistent with the rights of the data subject
- The data controller must keep personal data secure
- Where data is transferred outside the EEA the controller must ensure the recipient state has a comparable standard of data protection
List the main employment legislation and what it entails.
- Whistleblowing: Those who blow the whistle are protected by the Public Disclosure Act 1998
- Redundancy: Any employee with 2+ years of continous service is entitled to minimum redundancy payments set by the government
- Maternity/Paternity pay: Mothers/fathers have minimum statutory entitlements (e.g. work leave, pay)
- Unfair dismissal: Any employee with 1+ years continuous service is entitled to a tribunal if the reason for dismissal is inappropriate. Can lead to compensation, reinstatement or re-engagement.
- Wrongful dismissal: when there has been a breach of contract it can result in the individual receiving damages e.g. dismissed without appropriate notice or pay, or constructively dismissed, where the worked is forced to resign by the unreasonable conduct of the employer or summarily dismissed - dismissed without appropriate notice
- Employment contracts: An employee should be provided with particulars of employment within 2 months of starting the job
