Overriding legal obligations

Question 1

What are the protected characteristics in the Equality Act 2010?

Answer 1

• age
• disability
• gender reassignment
• marriage/civil partnerships
• pregnancy and maternity
• race
• religion or beliefs
• sex
• sexual orientation

Question 2

What are the key types of prohibited conduct?

Answer 2

• direct discrimination
• indirect discrimination
• discrimination arising from disability
• harassment
• victimisation

Question 3

What is direct discrimination?

Answer 3

direct discrimination occurs where a person is treated less favourably that someone else would have been in the same situation AND that difference in treatment is because of one of the protected characteristics

Question 4

What is indirect discrimination?

Answer 4

It occurs when a policy, practice or rule applies generally but has the effect of adversely impacting those who share a protected characteristic.

Question 5

When is indirect discrimination justified?

Answer 5

Where the policy, rule or practice aims to achieve a legitimate aim. It also must be a proportionate way of achieving the legitimate aim

Question 6

What is discrimination arising from disability?

Answer 6

When a person treats a disabled person unfavourably because of the person’s disability or because of something arising from the disability

Question 7

What is harassment?

Answer 7

When a person is subjected to unwanted conduct that relates to certain protected characteristics and the unwanted conduct violates the victim’s dignity or creates an intimidating, hostile, degrading, humiliating or offensive environment for that person. It can also be conduct of a sexual nature and the person is treated less favourably than they would have been treated because they rejected or submitted to the unwanted conduct

Question 8

What is victimisation?

Answer 8

Where a person subjects another person to a detriment because they believe that person has done, or will do, a protected act.

Question 9

What is a protected act?

Answer 9

• bringing proceedings under the Equality Act 2010
• giving evidence or information in proceedings brought under the Equality Act
• doing anything that is related to the provisions of the Equality Act
• alleging that another person has done something in breach of the Equality Act

Question 10

Does a victim of victimisation need to establish they have a protected characteristic?

Answer 10

No

Question 11

A solicitor will be deemed to have discriminated against a disabled person if they fail to comply with what?

Answer 11

The duty to make reasonable adjustments

Question 12

Firms must adopt a what approach?

Answer 12

Proactive rather than reactive approach

Question 13

What is positive action/discrimination?

Answer 13

When an employer may treat an employee or prospective employee more favourably because they have a protected characteristic.

Question 14

When is positive discrimination lawful?

Answer 14

Where the firm reasonably believes that persons who share a protected characteristic:
- suffer a disadvantage connected to the characteristic
- have different needs
- are disproportionately underrepresented in respect of a particular activity
- the positive action taken by the firm is a proportionate way of redressing the situation

Question 15

What is money laundering?

Answer 15

A method used to make it appear as though proceeds of crime derive from legitimate sources

Question 16

What are the key duties that derive from the money laundering regulations?

Answer 16

• maintain a written risk assessment that assess the risk of the firm being used from money laundering - reg 18
• establish and maintain policies, controls and procedure - reg 19
• appointment of a money laundering compliance officer and money laundering reporting officer
• provide staff with training
• verify the identity of each of their clients (customer due diligence)

Question 17

When must solicitors carry out CDD?

Answer 17

• forming a business relationship
• carrying out an occasional transaction that amounts to or exceeds approx. £15k
• the solicitor suspects money laundering
• the solicitor doubts the accuracy or adequacy of documents or information provided for CDD purposes

Question 18

When a client is a corporate body, solicitors must obtain and verify what?

Answer 18

• its name
• the company number
• the address of its registered office
• where the corporate body is not listed on a regulated market, the solicitor should ascertain the law the body is subject to, its constitution and the names of the board of directors and senior persons

Question 19

When must enhanced due diligence be applied?

Answer 19

• a person established in a high-risk third country
• a politically exposed person
• a family member/known associate of a PEP
• any other situation that presents a higher risk of money laundering (never met the client in person)

Question 20

What are some examples of ‘warning signs’ solicitors should look out for for money laundering?

Answer 20

• secretive behaviour
• uncooperative
• evasive
• avoids personal contact
• refuses to provide information or documents
• known to associate with criminals
• unusual sources of funding
• insistent on completing urgently
• completing a loss-making transaction
• client is not local to the firm
• unnecessary movement of money

Question 21

If a solicitor knows or suspects that a client is engaged in money laundering activity they _ report their concerns

Answer 21

Must

Question 22

Who must a solicitor report known or suspected money laundering activity to?

Answer 22

The firm’s nominated officer/MLRO

Question 23

When must an SAR be submitted to the NCA?

Answer 23

Where the nominated officer knows or suspects money laundering activity

Question 24

What are the direct involvement offences under POCA 2002?

Answer 24

s327 - if a solicitor conceals, disguises, converts or transfers criminal property or removes it from the UK
s328 - is a solicitor enters into or becomes concerned in an arrangement which they know or suspects facilitates the acquisition, retention, use or control of criminal property by or on behalf of another person
s329 - if a solicitor acquires, uses or has in possession of criminal property

Question 25

What are the non-direct involvement offences under POCA 2002?

Answer 25

s330 - if a solicitor fails to disclose information about money laundering to the appropriate authorities
s331 - if a nominated officer fails to disclose information about money laundering to the appropriate authorities
s333A(1) - reveals to a third person that an internal or external disclosure has been made (tipping off)
s333A(3) - where a third party is made aware of the fact that an investigation into a money laundering is being contemplated or carried out (tipping off)

Question 26

What are the defences to offences under POCA 2002?

Answer 26

• consent defence - solicitor can ask for consent to carry out activities that would otherwise be prohibited under the POCA. If no response from NCA within 7 days the solicitor can assume ‘deemed’ consent
• reasonable excuse - when the solicitor was going to make an authorised disclosure but had a reasonable excuse not to
• adequate consideration - only applies to s329
• training defence - a firms failure to provide training may provide a defence
• privileged circumstances - s330
• legal overseas conduct

Question 27

What are the three stages of money laundering?

Answer 27

1. Placement
2. Layering
3. Integration

Question 28

What is meant my placement?

Answer 28

Money from criminal activity is introduced into the financial system

Question 29

What is meant by layering?

Answer 29

The money passes through a number of parties or transactions to distance it from the criminal activity

Question 30

What is meant by integration?

Answer 30

The money is integrated back into the financial system and the criminal takes possession of the ‘laundered money’

Question 31

When should reports of money laundering take place?

Answer 31

As soon as is practicable and ideally before the relevant business takes place