Money laundering Flashcards
(43 cards)
Who is responsible for ensuring the firm takes all steps required to comply with the MLR and PoCA, to ensure an offence is not committed by the firm or any of its personnel?
The COLP, COFA and the managers/partners of the firm
For money laundering purposes, each law firm must nominate a
money laundering reporting officer (‘MLRO’) / ‘Nominated Officer’
Examples of suspicious fact patterns
a seller and buyer both from a jurisdiction outside the UK;
‘mistakes’ regarding an overpayment to your client account;
money coming from or being requested to be sent to offshore tax havens
High-risk jurisdictions on the FATF list
North Korea, Iran, Myanmar
s 327 direct involvement offence
concealing, disguising, converting or transferring criminal property or removing criminal property from the UK;
s 328 direct involvement offence
entering into or becoming concerned in an arrangement which you know or suspect facilitates (by whatever means) the acquisition, retention, use or control of criminal property by or on behalf of another person
s 329 direct involvement offence
acquiring, using or possessing criminal property
What action should you take as a defence to a direct involvement offence?
Make an authorised disclosure - ‘a disclosure to a constable, customs officer or a nominated officer by the alleged offender that property is criminal property’
When can an authorised disclosure be made?
before, during or after the solicitor carries out the prohibited act
If an authorised disclosure is made after the prohibited act, the requirements are that
there is a good reason for the solicitor’s failure to make the disclosure before he did the act;
the disclosure is made on his own initiative AND as soon as it is practicable to make it
A disclosure should be made to the nominated officer - who is the nominated officer in a law firm?
The MLRO
It is acceptable not to make a s 338 disclosure if you have a
reasonable excuse for not doing so
There is no offence committed if the criminal conduct which makes the property in question criminal property, took place outside the UK and was not
unlawful in the territory in which it took place
If you suspect that a person you are dealing with is planning to transfer criminal property to your firm or employer’s bank account, the golden rule is
Report your concern to your MLRO or other nominated official
Under s 330, it is an offence to fail to make a disclosure to the firm’s MLRO or the National Crime Agency if:
a) you know or suspect, or have reasonable grounds to know or suspect, that someone is laundering the proceeds of any criminal conduct;
b) you receive the information in the course of business in the regulated sector; and
c) you can identify the person who is laundering the proceeds of criminal conduct OR the whereabouts of the laundered property OR that the information referred to in (b) above will or may assist in identifying the person referred to at (a) above.
the body authorised to receive money laundering reports under PoCA
the National Crime Agency (NCA)
The disclosure must contain (3)
the identity of the suspect; the whereabouts of the laundered property (if known) and the information upon which your suspicion is based
What form will the MLRO fill out to disclose to the NCA?
a suspicious activity report (SAR)
If the MLRO decides to make a disclosure by way of a suspicious activity report (SAR) to NCA, neither the MLRO nor the fee earner should authorise or undertake any prohibited act unless:
a) authorised to do so by NCA; or
b) 7 working days (notice period) has passed from the disclosure to NCA during which time NCA has not refused authority to proceed.
c) The NCA refused consent during the notice period, and the moratorium period (31 days starting with the day that the firm received notice that consent was refused) has expired.
Can you disclose a money-laundering investigation to a client?
It is an offence to disclose that an investigation is being contemplated or carried out if the disclosure is likely to prejudice the investigation
What should you do to avoid committing an offence under PoCA?
You should make an authorised disclosure to your firm’s MLRO or nominated officer under s 338 Proceeds of Crime Act
Non-direct involvement offences apply to those working in the
‘regulated sector’, which includes
insurance, investment services, accountancy services, insolvency practitioners, providing tax advice, and participating in financial and real property transactions
penalty for an offence under PoCA is
imprisonment or a fine
Non-direct involvement offences include (2)
s 330: failure to disclose your suspicions to a nominated officer/MLRO
s 333A: tipping off
