Money laundering - Revision history

Designing Buildings at 07:50, 7 November 2020

2020-11-07T07:50:24Z

← Older revision		Revision as of 07:50, 7 November 2020
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	* VAT.		* VAT.

−	[[Category:~~Other_legislation~~]] [[Category:DCN_Legislation]]	+	[[Category:DCN_Definition]] [[Category:DCN_Guidance]] [[Category:DCN_Legislation]] [[Category:Other_legislation]]

Designing Buildings at 10:45, 15 March 2020

2020-03-15T10:45:22Z

← Older revision		Revision as of 10:45, 15 March 2020
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	Robust anti money laundering procedures are essential in order to comply with legal obligations. These obligations fall on each member of staff personally as well as upon the company.		Robust anti money laundering procedures are essential in order to comply with legal obligations. These obligations fall on each member of staff personally as well as upon the company.

−	~~= Find out more =~~	+	= Related articles on Designing Buildings Wiki =
−		+
−	=== Related articles on Designing Buildings Wiki ===	+

	* Company acquisitions in construction.		* Company acquisitions in construction.
Line 86:		Line 84:
	* VAT.		* VAT.

−	[[Category:Other_legislation]]	+	[[Category:Other_legislation]] [[Category:DCN_Legislation]]

Editor at 14:46, 4 June 2018

2018-06-04T14:46:12Z

← Older revision		Revision as of 14:46, 4 June 2018
Line 1:		Line 1:
	= Introduction =		= Introduction =

−	Money ~~Laundering~~ may be defined as '~~The~~ techniques, procedures or processes used to convert illegal funds obtained from criminal activities into other assets in such a way as to conceal a fund's true origin so it appears the money has come from a legitimate or lawful source.'	+	Money laundering may be defined as 'the techniques, procedures or processes used to convert illegal funds obtained from criminal activities into other assets in such a way as to conceal a fund's true origin so it appears the money has come from a legitimate or lawful source.'

	In recent years there has been an increased emphasis in using legislation to pass the burden for identifying money laundering acts from statutory authorities to financial institutions and businesses. At the same time the scope of legislation has widened significantly with draconian penalties available to the courts for those who break the law.		In recent years there has been an increased emphasis in using legislation to pass the burden for identifying money laundering acts from statutory authorities to financial institutions and businesses. At the same time the scope of legislation has widened significantly with draconian penalties available to the courts for those who break the law.
Line 14:		Line 14:
	= The Proceeds of Crime Act 2002 =		= The Proceeds of Crime Act 2002 =

−	This Act is the principle piece of legislation governing money laundering. It covers all types of crime, not just those arising directly from organised crime. It effectively creates notifiable incidents arising in situations that many of us would not consider as falling within the definition of 'money laundering'. There is also no de minimis limit. ~~Thus~~ a deliberate under-declaration of one's own tax liability, even of only a few pounds, is a money laundering offence.	+	This Act is the principle piece of legislation governing money laundering. It covers all types of crime, not just those arising directly from organised crime. It effectively creates notifiable incidents arising in situations that many of us would not consider as falling within the definition of 'money laundering'. There is also no [[De_minimis_in_construction\|de minimis]] limit. Therefore, a deliberate under-declaration of one's own tax liability, even of only a few pounds, is a money laundering offence.

	There are three primary offences under this Act		There are three primary offences under this Act
Line 37:		Line 37:
	= The Terrorism Act 2000 =		= The Terrorism Act 2000 =

−	Sections 18 - 23 of the Terrorism Act 2000 refer to the money laundering offences which could be committed in relation to terrorist funding. For example, Section 18 states that a person commits an offence if they enter into or become concerned with an arrangement which facilitates the retention by, or control of, another person of terrorist property. Also an offence would be committed if a person did not know, but should reasonably have suspected, the funds involved were terrorist property.	+	Sections 18-23 of the Terrorism Act 2000 refer to the money laundering offences which could be committed in relation to terrorist funding. For example, Section 18 states that a person commits an offence if they enter into or become concerned with an arrangement which facilitates the retention by, or control of, another person of terrorist property. Also an offence would be committed if a person did not know, but should reasonably have suspected, the funds involved were terrorist property.

	= Implications for practitioners =		= Implications for practitioners =
Line 80:		Line 80:

	* Company acquisitions in construction.		* Company acquisitions in construction.
		+	* De minimis.
	* IR35.		* IR35.
	* PAYE.		* PAYE.

Editor at 10:20, 13 June 2016

2016-06-13T10:20:53Z

← Older revision		Revision as of 10:20, 13 June 2016
Line 1:		Line 1:
−
	= Introduction =		= Introduction =

−	Money Laundering may be defined as '''The techniques, procedures or processes used to convert illegal funds obtained from criminal activities into other assets in such a way as to conceal a fund's true origin so it appears the money has come from a legitimate or lawful source''.'	+	Money Laundering may be defined as 'The techniques, procedures or processes used to convert illegal funds obtained from criminal activities into other assets in such a way as to conceal a fund's true origin so it appears the money has come from a legitimate or lawful source.'

	In recent years there has been an increased emphasis in using legislation to pass the burden for identifying money laundering acts from statutory authorities to financial institutions and businesses. At the same time the scope of legislation has widened significantly with draconian penalties available to the courts for those who break the law.		In recent years there has been an increased emphasis in using legislation to pass the burden for identifying money laundering acts from statutory authorities to financial institutions and businesses. At the same time the scope of legislation has widened significantly with draconian penalties available to the courts for those who break the law.

	Currently the law providing the framework for money laundering is to be found in:		Currently the law providing the framework for money laundering is to be found in:
−	*The Proceeds of Crime Act 2002.	+
−	*The Terrorism Act 2000.	+	* The Proceeds of Crime Act 2002.
−	*The Money Laundering Regulations 2003.	+	* The Terrorism Act 2000.
−	*FSA Money Laundering Sourcebook.	+	* The Money Laundering Regulations 2003.
		+	* FSA Money Laundering Sourcebook.

	= The Proceeds of Crime Act 2002 =		= The Proceeds of Crime Act 2002 =

−	This Act is the principle piece of legislation governing money laundering. It covers ~~'''~~all ~~'''~~types of crime, not just those arising directly from organised crime. It effectively creates notifiable incidents arising in situations that many of us would not consider as falling within the definition of 'money laundering'. There is also no de minimis limit. Thus a deliberate under-declaration of one's own tax liability, even of only a few pounds, is a money laundering offence.	+	This Act is the principle piece of legislation governing money laundering. It covers all types of crime, not just those arising directly from organised crime. It effectively creates notifiable incidents arising in situations that many of us would not consider as falling within the definition of 'money laundering'. There is also no de minimis limit. Thus a deliberate under-declaration of one's own tax liability, even of only a few pounds, is a money laundering offence.

	There are three primary offences under this Act		There are three primary offences under this Act

−	== ''1. Concealing'' ==	+	== 1. Concealing ==

	Where someone knows or suspects that property is a benefit from criminal conduct or it represents (directly or indirectly) such a benefit, then they commit an offence if they conceal, disguise, convert, transfer or remove that criminal property from England, Wales, Scotland or Northern Ireland.		Where someone knows or suspects that property is a benefit from criminal conduct or it represents (directly or indirectly) such a benefit, then they commit an offence if they conceal, disguise, convert, transfer or remove that criminal property from England, Wales, Scotland or Northern Ireland.

−	== ''2. Arranging'' ==	+	== 2. Arranging ==

	An offence is committed by a person if they enter into or become concerned in an arrangement which they know or suspect facilitates the acquisition, retention, use or control of criminal property by, or on behalf of, another person.		An offence is committed by a person if they enter into or become concerned in an arrangement which they know or suspect facilitates the acquisition, retention, use or control of criminal property by, or on behalf of, another person.

−	== ''3. Acquisition use and possession'' ==	+	== 3. Acquisition use and possession ==

	An offence is committed if someone, knowing or suspecting that property is a person's benefit from criminal conduct (directly or indirectly) acquires, uses or has possession of property.		An offence is committed if someone, knowing or suspecting that property is a person's benefit from criminal conduct (directly or indirectly) acquires, uses or has possession of property.

	There are also two third party offences:		There are also two third party offences:
−	*Failure to disclose a primary offence.
−	*Tipping off persons engaged in money laundering or terrorist financing as to an investigation.

−	= ~~'''~~The Terrorism Act 2000~~'''~~ =	+	* Failure to disclose a primary offence.
		+	* Tipping off persons engaged in money laundering or terrorist financing as to an investigation.
		+
		+	= The Terrorism Act 2000 =

	Sections 18 - 23 of the Terrorism Act 2000 refer to the money laundering offences which could be committed in relation to terrorist funding. For example, Section 18 states that a person commits an offence if they enter into or become concerned with an arrangement which facilitates the retention by, or control of, another person of terrorist property. Also an offence would be committed if a person did not know, but should reasonably have suspected, the funds involved were terrorist property.		Sections 18 - 23 of the Terrorism Act 2000 refer to the money laundering offences which could be committed in relation to terrorist funding. For example, Section 18 states that a person commits an offence if they enter into or become concerned with an arrangement which facilitates the retention by, or control of, another person of terrorist property. Also an offence would be committed if a person did not know, but should reasonably have suspected, the funds involved were terrorist property.

−	= ~~'''~~Implications for practitioners~~'''~~ =	+	= Implications for practitioners =

	The consequences of committing either primary or third party offences could be serious. Without direct involvement, however, it is difficult to see how a practitioner could be guilty of committing a primary offence under the Proceeds of Crime Act. It must, however, be emphasised that failure to report a suspicion could be an offence.		The consequences of committing either primary or third party offences could be serious. Without direct involvement, however, it is difficult to see how a practitioner could be guilty of committing a primary offence under the Proceeds of Crime Act. It must, however, be emphasised that failure to report a suspicion could be an offence.

	Individual employees in regulated sector firms can discharge their disclosure obligations under the Proceeds of Crime Act and avoid committing a criminal offence by making a 'required disclosure'. This may be in the form of a report to the firm’s money laundering reporting officer in accordance with internal procedures. It is important to note here that if an individual does not make a required disclosure and subsequently a court determines that the individual had reasonable grounds for suspecting that a transaction involved money laundering only two general defences are available:		Individual employees in regulated sector firms can discharge their disclosure obligations under the Proceeds of Crime Act and avoid committing a criminal offence by making a 'required disclosure'. This may be in the form of a report to the firm’s money laundering reporting officer in accordance with internal procedures. It is important to note here that if an individual does not make a required disclosure and subsequently a court determines that the individual had reasonable grounds for suspecting that a transaction involved money laundering only two general defences are available:
−	~~#The individual had a 'reasonable excuse' for not making a required disclosure.~~
−	~~#The individual has not been provided with suitable training by his employer and did not have knowledge or suspicion of money laundering.~~

−	~~= '~~''Implications for companies~~'''~~ =	+	# The individual had a 'reasonable excuse' for not making a required disclosure.
		+	# The individual has not been provided with suitable training by his employer and did not have knowledge or suspicion of money laundering.
		+
		+	= Implications for companies =

	The regulated company carries the responsibility to ensure that all staff, and in particular those who perform client-facing roles, are fully aware of the law relating to money laundering and have been trained to identify potential money-laundering scenarios. It is also the company's responsibility to implement procedures for reporting suspicious transactions internally and to escalate the matter on to the National Crime Intelligence Service if necessary.		The regulated company carries the responsibility to ensure that all staff, and in particular those who perform client-facing roles, are fully aware of the law relating to money laundering and have been trained to identify potential money-laundering scenarios. It is also the company's responsibility to implement procedures for reporting suspicious transactions internally and to escalate the matter on to the National Crime Intelligence Service if necessary.
Line 52:		Line 54:
	The company should appoint a money laundering reporting officer (MLRO) to whom all suspicious transactions must be reported. The company must maintain a log of all such reports. It will be the MLRO's responsibility to decide whether the transaction is suspicious, whether it may proceed and, if not, to make a formal Suspicious Activity Report to the National Crime Intelligence Service.		The company should appoint a money laundering reporting officer (MLRO) to whom all suspicious transactions must be reported. The company must maintain a log of all such reports. It will be the MLRO's responsibility to decide whether the transaction is suspicious, whether it may proceed and, if not, to make a formal Suspicious Activity Report to the National Crime Intelligence Service.

−	= ~~'''~~Identifying suspicious transactions~~'''~~ =	+	= Identifying suspicious transactions =

	There is no clear definition of what may constitute a suspicious transaction. Areas of vulnerability and factors which may give rise to suspicion might include:		There is no clear definition of what may constitute a suspicious transaction. Areas of vulnerability and factors which may give rise to suspicion might include:
−	*A new corporate / trust client where there are difficulties encountered in obtaining copies of accounts or other incorporation documents.	+
−	*A personal customer where ID verification proves problematic.	+	* A new corporate / trust client where there are difficulties encountered in obtaining copies of accounts or other incorporation documents.
−	*Difficulty in verifying information provided by a customer.	+	* A personal customer where ID verification proves problematic.
−	*Complex offshore structures.	+	* Difficulty in verifying information provided by a customer.
−	*Any transaction involving an undisclosed third party.	+	* Complex offshore structures.
−	*A request to insure goods in overseas locations known to have drug-trafficking, organised crime or terrorist connections.	+	* Any transaction involving an undisclosed third party.
−	*Attempts to pay large sums in cash.	+	* A request to insure goods in overseas locations known to have drug-trafficking, organised crime or terrorist connections.
−	*Extensive use of bank giro rather than cheque / demand draft.	+	* Attempts to pay large sums in cash.
−	*Use of a third party cheque to purchase.	+	* Extensive use of bank giro rather than cheque / demand draft.
−	*Apparent involvement of complex intermediary chain.	+	* Use of a third party cheque to purchase.
		+	* Apparent involvement of complex intermediary chain.

	Applying common sense is a valuable element in identifying transactions that are unusual.		Applying common sense is a valuable element in identifying transactions that are unusual.

−	= ~~'''~~Summary~~'''~~ =	+	= Summary =

	Robust anti money laundering procedures are essential in order to comply with legal obligations. These obligations fall on each member of staff personally as well as upon the company.		Robust anti money laundering procedures are essential in order to comply with legal obligations. These obligations fall on each member of staff personally as well as upon the company.
Line 75:		Line 78:

	=== Related articles on Designing Buildings Wiki ===		=== Related articles on Designing Buildings Wiki ===
−	*IR35.	+
−	*PAYE.	+	* Company acquisitions in construction.
−	*[http://www.designingbuildings.co.uk/wiki/Category:Taxation Taxation articles index].	+	* IR35.
−	*VAT.	+	* PAYE.
		+	* [http://www.designingbuildings.co.uk/wiki/Category:Taxation Taxation articles index].
		+	* VAT.

	[[Category:Other_legislation]]		[[Category:Other_legislation]]

Designing Buildings at 07:05, 28 June 2014

2014-06-28T07:05:12Z

← Older revision		Revision as of 07:05, 28 June 2014
Line 1:		Line 1:
−	~~<div>~~	+
	= Introduction =		= Introduction =

Line 26:		Line 26:
	An offence is committed by a person if they enter into or become concerned in an arrangement which they know or suspect facilitates the acquisition, retention, use or control of criminal property by, or on behalf of, another person.		An offence is committed by a person if they enter into or become concerned in an arrangement which they know or suspect facilitates the acquisition, retention, use or control of criminal property by, or on behalf of, another person.

−	== ''3. Acquisition use and possession'' ==	+	== ''3. Acquisition use and possession'' ==

	An offence is committed if someone, knowing or suspecting that property is a person's benefit from criminal conduct (directly or indirectly) acquires, uses or has possession of property.		An offence is committed if someone, knowing or suspecting that property is a person's benefit from criminal conduct (directly or indirectly) acquires, uses or has possession of property.
Line 76:		Line 76:
	=== Related articles on Designing Buildings Wiki ===		=== Related articles on Designing Buildings Wiki ===
	*IR35.		*IR35.
−	*Taxation.	+	*PAYE.
		+	*[http://www.designingbuildings.co.uk/wiki/Category:Taxation Taxation articles index].
	*VAT.		*VAT.
−	~~</div>~~

	[[Category:Other_legislation]]		[[Category:Other_legislation]]

Designing Buildings at 07:41, 15 May 2013

2013-05-15T07:41:14Z

← Older revision		Revision as of 07:41, 15 May 2013
Line 1:		Line 1:
	<div>		<div>
		+	= Introduction =
		+
	Money Laundering may be defined as '''The techniques, procedures or processes used to convert illegal funds obtained from criminal activities into other assets in such a way as to conceal a fund's true origin so it appears the money has come from a legitimate or lawful source''.'		Money Laundering may be defined as '''The techniques, procedures or processes used to convert illegal funds obtained from criminal activities into other assets in such a way as to conceal a fund's true origin so it appears the money has come from a legitimate or lawful source''.'

Line 5:		Line 7:

	Currently the law providing the framework for money laundering is to be found in:		Currently the law providing the framework for money laundering is to be found in:
−
	*The Proceeds of Crime Act 2002.		*The Proceeds of Crime Act 2002.
	*The Terrorism Act 2000.		*The Terrorism Act 2000.
Line 11:		Line 12:
	*FSA Money Laundering Sourcebook.		*FSA Money Laundering Sourcebook.

−	~~'''~~The Proceeds of Crime Act 2002~~'''~~	+	= The Proceeds of Crime Act 2002 =

	This Act is the principle piece of legislation governing money laundering. It covers '''all '''types of crime, not just those arising directly from organised crime. It effectively creates notifiable incidents arising in situations that many of us would not consider as falling within the definition of 'money laundering'. There is also no de minimis limit. Thus a deliberate under-declaration of one's own tax liability, even of only a few pounds, is a money laundering offence.		This Act is the principle piece of legislation governing money laundering. It covers '''all '''types of crime, not just those arising directly from organised crime. It effectively creates notifiable incidents arising in situations that many of us would not consider as falling within the definition of 'money laundering'. There is also no de minimis limit. Thus a deliberate under-declaration of one's own tax liability, even of only a few pounds, is a money laundering offence.
Line 17:		Line 18:
	There are three primary offences under this Act		There are three primary offences under this Act

−	''1. Concealing''	+	== ''1. Concealing'' ==

	Where someone knows or suspects that property is a benefit from criminal conduct or it represents (directly or indirectly) such a benefit, then they commit an offence if they conceal, disguise, convert, transfer or remove that criminal property from England, Wales, Scotland or Northern Ireland.		Where someone knows or suspects that property is a benefit from criminal conduct or it represents (directly or indirectly) such a benefit, then they commit an offence if they conceal, disguise, convert, transfer or remove that criminal property from England, Wales, Scotland or Northern Ireland.

−	''2. Arranging''	+	== ''2. Arranging'' ==

	An offence is committed by a person if they enter into or become concerned in an arrangement which they know or suspect facilitates the acquisition, retention, use or control of criminal property by, or on behalf of, another person.		An offence is committed by a person if they enter into or become concerned in an arrangement which they know or suspect facilitates the acquisition, retention, use or control of criminal property by, or on behalf of, another person.

−	''3. Acquisition use and possession''	+	== ''3. Acquisition use and possession'' ==
		+
	An offence is committed if someone, knowing or suspecting that property is a person's benefit from criminal conduct (directly or indirectly) acquires, uses or has possession of property.		An offence is committed if someone, knowing or suspecting that property is a person's benefit from criminal conduct (directly or indirectly) acquires, uses or has possession of property.

	There are also two third party offences:		There are also two third party offences:
−
	*Failure to disclose a primary offence.		*Failure to disclose a primary offence.
	*Tipping off persons engaged in money laundering or terrorist financing as to an investigation.		*Tipping off persons engaged in money laundering or terrorist financing as to an investigation.

−	'''The Terrorism Act 2000'''	+	= '''The Terrorism Act 2000''' =

	Sections 18 - 23 of the Terrorism Act 2000 refer to the money laundering offences which could be committed in relation to terrorist funding. For example, Section 18 states that a person commits an offence if they enter into or become concerned with an arrangement which facilitates the retention by, or control of, another person of terrorist property. Also an offence would be committed if a person did not know, but should reasonably have suspected, the funds involved were terrorist property.		Sections 18 - 23 of the Terrorism Act 2000 refer to the money laundering offences which could be committed in relation to terrorist funding. For example, Section 18 states that a person commits an offence if they enter into or become concerned with an arrangement which facilitates the retention by, or control of, another person of terrorist property. Also an offence would be committed if a person did not know, but should reasonably have suspected, the funds involved were terrorist property.

−	'''Implications for practitioners'''	+	= '''Implications for practitioners''' =

	The consequences of committing either primary or third party offences could be serious. Without direct involvement, however, it is difficult to see how a practitioner could be guilty of committing a primary offence under the Proceeds of Crime Act. It must, however, be emphasised that failure to report a suspicion could be an offence.		The consequences of committing either primary or third party offences could be serious. Without direct involvement, however, it is difficult to see how a practitioner could be guilty of committing a primary offence under the Proceeds of Crime Act. It must, however, be emphasised that failure to report a suspicion could be an offence.

	Individual employees in regulated sector firms can discharge their disclosure obligations under the Proceeds of Crime Act and avoid committing a criminal offence by making a 'required disclosure'. This may be in the form of a report to the firm’s money laundering reporting officer in accordance with internal procedures. It is important to note here that if an individual does not make a required disclosure and subsequently a court determines that the individual had reasonable grounds for suspecting that a transaction involved money laundering only two general defences are available:		Individual employees in regulated sector firms can discharge their disclosure obligations under the Proceeds of Crime Act and avoid committing a criminal offence by making a 'required disclosure'. This may be in the form of a report to the firm’s money laundering reporting officer in accordance with internal procedures. It is important to note here that if an individual does not make a required disclosure and subsequently a court determines that the individual had reasonable grounds for suspecting that a transaction involved money laundering only two general defences are available:
−
	#The individual had a 'reasonable excuse' for not making a required disclosure.		#The individual had a 'reasonable excuse' for not making a required disclosure.
	#The individual has not been provided with suitable training by his employer and did not have knowledge or suspicion of money laundering.		#The individual has not been provided with suitable training by his employer and did not have knowledge or suspicion of money laundering.

−	'''Implications for companies'''	+	= '''Implications for companies''' =

	The regulated company carries the responsibility to ensure that all staff, and in particular those who perform client-facing roles, are fully aware of the law relating to money laundering and have been trained to identify potential money-laundering scenarios. It is also the company's responsibility to implement procedures for reporting suspicious transactions internally and to escalate the matter on to the National Crime Intelligence Service if necessary.		The regulated company carries the responsibility to ensure that all staff, and in particular those who perform client-facing roles, are fully aware of the law relating to money laundering and have been trained to identify potential money-laundering scenarios. It is also the company's responsibility to implement procedures for reporting suspicious transactions internally and to escalate the matter on to the National Crime Intelligence Service if necessary.
Line 52:		Line 52:
	The company should appoint a money laundering reporting officer (MLRO) to whom all suspicious transactions must be reported. The company must maintain a log of all such reports. It will be the MLRO's responsibility to decide whether the transaction is suspicious, whether it may proceed and, if not, to make a formal Suspicious Activity Report to the National Crime Intelligence Service.		The company should appoint a money laundering reporting officer (MLRO) to whom all suspicious transactions must be reported. The company must maintain a log of all such reports. It will be the MLRO's responsibility to decide whether the transaction is suspicious, whether it may proceed and, if not, to make a formal Suspicious Activity Report to the National Crime Intelligence Service.

−	'''Identifying suspicious transactions'''	+	= '''Identifying suspicious transactions''' =
−		+
−	~~There is no clear definition of what may constitute a suspicious transaction. Areas of vulnerability and factors which may give rise to suspicion might include:~~	+

		+	There is no clear definition of what may constitute a suspicious transaction. Areas of vulnerability and factors which may give rise to suspicion might include:
	*A new corporate / trust client where there are difficulties encountered in obtaining copies of accounts or other incorporation documents.		*A new corporate / trust client where there are difficulties encountered in obtaining copies of accounts or other incorporation documents.
	*A personal customer where ID verification proves problematic.		*A personal customer where ID verification proves problematic.
Line 69:		Line 68:
	Applying common sense is a valuable element in identifying transactions that are unusual.		Applying common sense is a valuable element in identifying transactions that are unusual.

−	'''Summary'''	+	= '''Summary''' =

	Robust anti money laundering procedures are essential in order to comply with legal obligations. These obligations fall on each member of staff personally as well as upon the company.		Robust anti money laundering procedures are essential in order to comply with legal obligations. These obligations fall on each member of staff personally as well as upon the company.

−	~~----~~	+	= Find out more =
−		+
−	= ~~See also~~ =	+

		+	=== Related articles on Designing Buildings Wiki ===
		+	*IR35.
	*Taxation.		*Taxation.
−		+	*VAT.
	</div>		</div>
−	~~<br/>~~

	[[Category:Other_legislation]]		[[Category:Other_legislation]]

Designing Buildings at 12:19, 26 July 2012

2012-07-26T12:19:59Z

Show changes

Martincantor: Created page with "
'''Definition''' Money Laundering may be defined as: "The techniques, procedures or processes used to convert illegal funds obtained from criminal activities into other a..."

2012-07-26T10:19:11Z

Created page with "<div> '''Definition''' Money Laundering may be defined as: "The techniques, procedures or processes used to convert illegal funds obtained from criminal activities into other a..."

New page

<div>
'''Definition'''

Money Laundering may be defined as:

"The techniques, procedures or processes used to convert illegal funds obtained from criminal activities into other assets in such a way as to conceal a fund's true origin so it appears the money has come from a legitimate or lawful source."

'''The Law'''

In recent years there has been an increased emphasis in using legislation to pass the burden for identifying money laundering acts from statutory authorities to financial institutions and businesses. At the same time the scope of legislation has widened significantly with draconian penalties available to the Courts for those who break the law.

Currently the law providing the framework for money laundering is to be found in:

The Proceeds of Crime Act 2002

The Terrorism Act 2000

The Money Laundering Regulations 2003

FSA Money Laundering Sourcebook.

''The Proceeds of Crime Act 2002''

This act is the principle piece of legislation governing money laundering. This Act covers '''all '''types of crime, not just those arising directly from organised crime. It effectively creates notifiable incidents arising in situations that many of us would not consider as falling within the terms "Money Laundering". There is also no de minimis limit. Thus a deliberate under-declaration of one's own tax liability, even of only a few pounds, is a money laundering offence.

There are '''''three primary offences''''' under this Act

'''CONCEALING'''

Where someone knows or suspects that property is a benefit from criminal conduct or it represents (directly or indirectly) such a benefit, then they commit an offence if they conceal, disguise, convert, transfer or remove that criminal property from England, Wales, Scotland or Northern Ireland.

'''ARRANGING'''

An offence is committed by a person if they enter into or become concerned in an arrangement which they know or suspect facilitates the acquisition, retention use or control of criminal property by, or on behalf of, another person.

'''ACQUISITION USE AND POSSESSION'''

An Offence is committed if someone, knowing or suspecting that property is a person's benefit from criminal conduct (directly or indirectly) acquires, uses or has possession of property.

There are '''two "third party'''" offences

''FAILURE TO DISCLOSE A PRIMARY OFFENCE'', and

''TIPPING OFF OF PERSONS ENGAGED IN MONEY LAUNDERING OR TERRORIST FINANCING AS TO ANY INVESTIGATION''

'''The Terrorism Act 2000'''

S18 - 23 refer to the money laundering offences which could be committed in relation to terrorist funding. For example, S18 states that a person commits an offence if they enter into or become concerned with an arrangement which facilitates the retention by, or control of, another person of terrorist property. ''Also an offence would be committed if a person did not know, but should reasonably have suspected, the funds involved were terrorist property.''

'''Implications for Practitioners'''

It follows from what is stated above that the consequences of committing either primary or third party offences could be serious. Without direct involvement, however, it is difficult to see how a practitioner could be guilty of committing a primary offence under the Proceeds of Crime Act. It must, however, be emphasised that failure to report a suspicion could be an offence.

Individual employees in regulated sector firms can discharge their disclosure obligations under POCA and avoid committing a criminal offence by making a “required disclosure”. This may be in the form of a report to the firm’s MLRO in accordance with internal procedures. It is important to note here that if an individual does not make a required disclosure and subsequently a court determines that the individual had reasonable grounds for suspecting that a transaction involved money laundering only two general defences are available:
<ol style="list-style-type:upper-alpha;">
<li>the individual had a “reasonable excuse” for not making a required disclosure, or</li>
<li>The individual has not been provided with suitable training by his employer and did not have knowledge or suspicion of money laundering.</li>
</ol>

'''Implications for Companies'''

The regulated company carries the responsibility to ensure that all staff, and in particular those who perform client-facing roles, are fully aware of the law relating to money laundering and have been trained to identify potential money-laundering scenarios. It is also the company's responsibility to implement procedures for reporting suspicious transactions internally and to escalate the matter on to the National Crime Intelligence Service (NCIS) if necessary.

The company should appoint a money laundering reporting officer (MLRO) to whom all suspicious transactions must be reported. The company must maintain a log of all such reports. It will be the MLRO's responsibility to decide whether the transaction is suspicious, whether it may proceed and, if not, to make a formal Suspicious Activity Report (SAR) to the NCIS.

'''Identifying suspicious transactions'''

There is no clear definition of what may constitute a suspicious transaction. Attached at Appendix A is a list of areas of vulnerability and factors which may give rise to suspicion.

''Applying common sense is a valuable element in identifying transactions that are unusual''.

'''Summary'''

Robust anti money laundering procedures are essential in order to comply with legal obligations. These obligations fall on each member of staff personally as well as upon the Company.

'''APPENDIX A'''

''Examples of possible money laundering scenarios''

A new corporate/trust client where there are difficulties encountered in obtaining copies of accounts or other incorporation documents

A personal customer where ID verification proves problematical.

Difficulty in verifying information provided by a customer

Complex offshore structures

Any transaction involving an undisclosed third party.

A request to insure goods in overseas locations known to have drug-trafficking, organised crime or terrorist connections.

Attempts to pay large sums in cash.

Extensive use of Bank Giro rather than cheque/DD

Use of a third party cheque to purchase.

Apparent involvement of complex intermediary chain.

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[[Category:Other_legislation]]