Unit 3: Money Laundering and POCA

Question 1

Who does the ‘Money Laundering, Terrorist Financing and Transfer of Funds (information on the payer) regulations 2017’ apply to?

Answer 1

The regulations apply to persons acting in the course of business carried out in the UK, including ‘independent legal professionals’ (reg 8)
- Including firms and sole practitioners

Question 1

Role of the ‘nominated officer’

Answer 1

receive reports from within the firm concerning any instance of suspected money laundering and to liaise with NCA (national crime agency)

Question 1

In addition to the nominated officer, what additional position should larger firms have in their staff?

Answer 1

MLCO (Money Laundering Compliance Officer)

Question 2

Can the roles of NO and the MLCO be vested in the same individual?

Answer 2

Yes

Question 3

What does ‘enhanced monitoring’ entail? When is it used?

Answer 3

1. Ongoing monitoring (internally and externally) about the individual in question
2. Used as a component of enhanced due diligence, which is used when a transaction is high risk and / or includes a PEP

Question 3

Verifying ID of a company’s beneficial owner: Methods

Answer 3

Depending on identity of BO, use standard verification procedures for individuals / bodies corporate

Question 4

Are all judges PEPs?

Answer 4

No, only members of supreme courts, of constitutional courts or of other high-level judicial bodies whose decisions are not generally subject to further appeal (except in exceptional circumstances), not low-level

Question 5

Failure to Disclose Offence

Answer 5

A person commits an offence under s 330 POCA 2002 if:

1. he knows or suspects, or has reasonable grounds to suspect that a person is engaged in money laundering
2. the information comes to him in the course of a business in the regulated sector;
3. the information may assist in identifying the money launderer or the location of any laundered property; and
4. he does not make a disclosure as soon as is practicable

Question 6

Maximum sentence for s330 Failure to Disclose

Answer 6

5 years’ imprisonment

Question 7

Objective Test for Failure to Disclose

Answer 7

Individual must either ‘suspect or know’ or reasonably ought to have ‘suspected or known’

Question 8

Ways a solicitor can escape liability for s 330 failure to disclose? Aside from the defences.

Answer 8

If the solicitor has information but is genuinely unable to provide it

Question 9

Defences relevant to s 330 failure to disclose

Answer 9

1. Training Defence
2. Overseas Defence
3. Legal Professional Privilege Defence

Question 10

Legal Professional Privilege Defence to s 330

Answer 10

General Rule: Solicitors are not required to divulge information subject to privilege UNLESS the information is communicated with the PURPOSE of committing a crime

Question 11

Once the nominated officer seeks the consent of the NCA through a SAR, WHEN can they give consent to the solicitor to proceed with the matter?

Answer 11

1. If NO receives consent of NCA
2. If NO hears nothing from NCA for 7 days
3. If NCA refuses, but then says nothing for 31 days
4. If NCA refuses, but changes their mind within 31 day period