Money laundering is the process by which criminals
try to conceal the true nature of proceeds of illegal activities. The term
includes possessing, in any way dealing with or concealing the proceeds of any
crime.
try to conceal the true nature of proceeds of illegal activities. The term
includes possessing, in any way dealing with or concealing the proceeds of any
crime.
This includes monies generated through tax evasion,
bribery and corruption or the
bribery and corruption or the
operation of gangs involved in more conventional
criminal activities, such as drug or people smuggling, illegal arms trading,
theft and robbery etc.
The regulations have been extended considerably
since the rules on money laundering were first introduced by the criminal
justice act 1993. In particular, the financing of terrorism has focused
government attention internationally and governments are setting in place
initiative whereby they can c0-operate globally in an effort to track monies
being used fund terrorist groups.
since the rules on money laundering were first introduced by the criminal
justice act 1993. In particular, the financing of terrorism has focused
government attention internationally and governments are setting in place
initiative whereby they can c0-operate globally in an effort to track monies
being used fund terrorist groups.
At present the legislation relating to money
laundering includes:
laundering includes:
·
The
criminal justice act 1993;
The
criminal justice act 1993;
·
The
terrorism act 2000;
The
terrorism act 2000;
·
The
proceeds of crime act 2002;
The
proceeds of crime act 2002;
·
The money
laundering regulations 2003.
The money
laundering regulations 2003.
Firms must appoint‘money laundering reporting
officer’ (MLRO) to deal with the whole matter. The job of the MLRO is to
receive and assess reports about suspicious transactions from partners and
staff and to make reports to the serious and organized crime agency (SOCA). The
reports must give full details of the suspicious transactions and the
identities of the persons involved.
officer’ (MLRO) to deal with the whole matter. The job of the MLRO is to
receive and assess reports about suspicious transactions from partners and
staff and to make reports to the serious and organized crime agency (SOCA). The
reports must give full details of the suspicious transactions and the
identities of the persons involved.
In addition, firms must put in place systems and procedures
which fundamentally ensure that staff is aware of their responsibilities under
the legislation and that the firm itself has procedures and internal control
which will enable suspicious transaction to be identified and reported in
accordance with regulations.
which fundamentally ensure that staff is aware of their responsibilities under
the legislation and that the firm itself has procedures and internal control
which will enable suspicious transaction to be identified and reported in
accordance with regulations.
In particular these should include procedures which
ensure that:
ensure that:
·
Before
accepting an assignment they take all necessary steps to establish that their potential
new client is who it claims to be. This can include proof of identity for
individual clients and inspecting the company certificate of incorporation.
Before
accepting an assignment they take all necessary steps to establish that their potential
new client is who it claims to be. This can include proof of identity for
individual clients and inspecting the company certificate of incorporation.
·
If they
handle clients’ money accountants have controls which ensure that the identiy
of the client, the commercial purpose of the transaction, the source of the
funds and their destination are known and verifiable.
If they
handle clients’ money accountants have controls which ensure that the identiy
of the client, the commercial purpose of the transaction, the source of the
funds and their destination are known and verifiable.
·
Staffs
have training in the regulations and how to identify suspicious transactions.
Staffs
have training in the regulations and how to identify suspicious transactions.
·
The firm
has procedures to review client’s activities on an ongoing basis.
The firm
has procedures to review client’s activities on an ongoing basis.
·
‘Suspicious
transaction reports’ are made to the MLRO should they be identified.
‘Suspicious
transaction reports’ are made to the MLRO should they be identified.
·
The MLRO
reports these to the SOCA.
The MLRO
reports these to the SOCA.
Generally firms commit an offence under the
regulations if they fail to implement these procedures.
regulations if they fail to implement these procedures.
In addition, there are some other offences which
can be committed under the regulations which the student should be aware of.
These are:
can be committed under the regulations which the student should be aware of.
These are:
·
Attempting,
conspiring with or inciting someone to commit an offence.
Attempting,
conspiring with or inciting someone to commit an offence.
·
Aiding or
abetting an offence or advising on the commission of an offence.
Aiding or
abetting an offence or advising on the commission of an offence.
·
Obtaining,
co concealing or investing funds or property knowing or suspecting that they
are the proceeds of crime or funds for terrorist activity.
Obtaining,
co concealing or investing funds or property knowing or suspecting that they
are the proceeds of crime or funds for terrorist activity.
·
Doing or
disclosing anything that might prejudice an investigation into money laundering
activities-this is known as ‘tipping off’.
Doing or
disclosing anything that might prejudice an investigation into money laundering
activities-this is known as ‘tipping off’.
·
Proceeding
with a transaction without the consent of the relevant authority after having
submitted a suspicious transaction report.
Proceeding
with a transaction without the consent of the relevant authority after having
submitted a suspicious transaction report.
