1.1 Money laundering is the process by which criminals attempt to conceal the true origin and ownership of the proceeds of their criminal activities. If they are successful, it also allows them to maintain control over their proceeds and, ultimately, to provide a legitimate cover for their source of funds. Legislation concerning money laundering (the Terrorism Act 2000, the Proceeds of Crime Act 2002 and the Money Laundering Regulations 2007) has broadened the definition of money laundering and increased the range of activities caught by the statutory framework. As a result, the obligations now impact on more areas of business activity and require businesses to establish internal procedures to prevent the use of their services for money laundering.
2.1 This Policy applies to all employees of CreditChum and aims to maintain the high standards of conduct which currently exist within the company by preventing criminal activity through money laundering. The Policy sets out the procedures which must be followed (for example the reporting of suspicions of money laundering activity) to enable the company to comply with its legal obligations.
These obligations require the company to identify, assess, monitor, and manage its money laundering risk. They need to be proportionate, taking into account the following: -
2.2 Anti money laundering legislation places responsibility upon CreditChum employees to combat money laundering and covers a very wide area of financial transactions, including possessing, or in any way dealing with, or concealing, the proceeds of any crime. It applies to all employees involved with monetary transactions.
2.3 Under the legislation it is a criminal offence to:
3.1 The legislative requirements concerning anti-money laundering procedures are extensive and complex. This Policy has been written to enable the company to meet the legal requirements in a way which is proportionate to the exceptionally low risk to the company of contravening this legislation.
3.2 The object of this policy is to make all employees aware of their responsibilities and the consequences of non-compliance with this policy.
3.3 Any employee could potentially be caught by the money laundering provisions if they suspect money laundering and either become involved with it in some way and /or do nothing about it.
3.4 Whilst the risk to the company of contravening the legislation is low, it is extremely important that all employees are familiar with their legal responsibilities.
4.1. Provision of training and guidance to relevant officers and staff on the requirements of the legislation, including the identification of suspicious transactions, identity verification and reporting procedures.
4.2. Establishment of procedures for employees to report any suspicions to the Money Laundering Reporting Officer (“MLRO”) – i.e., the Finance Manager (Nominated Deputy – Compliance Manager).
4.3. Designation of an officer as the Money Laundering Reporting Officer, who will receive any report, keep records and if considered appropriate, make reports to the National Crime Agency (NCA) - i.e., the Finance Manager (Nominated Deputy – Compliance Manager).
4.4. Under the legislation employees dealing with money transactions will be required to comply with certain procedures.
5.1 At all times staff should:
5.2 Possible signs of money laundering are set out in Appendix 2.
6.1 Client identification procedures apply when the company is carrying out relevant business and: -
6.2 Not all the company’s business is “relevant” for the purposes of the legislation regarding client identification. For example, our position as a broker rather than a lender would mean that our responsibilities vis a vis identification of each loan applicant is reduced; as a broker, our client is not the applicant as such – provide the service to them free of charge and it is the lender that would hold the main identification responsibility; however, we do have responsibilities in the identification of officers of the other business entities we have dealings with
6.3 Finance staff must follow the procedures set out in Appendix 1 in order to ascertain the true identity of clients and ensure record keeping procedures (e.g., for evidence of identity obtained, details of transactions undertaken, for at least 5 years afterwards).
This is so they may be used as evidence in any subsequent investigation by the authorities into money laundering.
7.1 The precise nature of the records is not prescribed by law however they must be capable of providing an audit trail during any investigation, for example distinguishing the person or organisation and the relevant transaction and recording in what form any funds were received or paid. In practice, CreditChum will be routinely making records of work carried out for persons or organisations in the course of normal business and these should be sufficient for this requirement.
8.1 To comply with the legislation all staff are required to follow the reporting procedures set out in this policy if they have knowledge of or suspicion of money laundering taking place.
8.2 The Officer nominated to receive disclosures about potential money laundering activity within the company is the Finance Manager i.e. The Money Laundering Reporting Officer (MLRO). The Deputy Money Laundering Reporting Officer is the Compliance Manager.
8.3 Where an employee knows or suspects that a money laundering activity is taking place, they must contact the MLRO for guidance as soon as possible regardless of the amount involved.
8.4 Employees must still report their concerns, even if they believe someone else has already reported their suspicions of the same money laundering activity.
8.5 After reporting, the employee must not make any further enquiries into the matter and at no time and under no circumstances should they voice any suspicions to the person(s) whom they suspect of money laundering, otherwise, they may commit a criminal offence of “tipping off”. Also, they should not record on a client file that the MLRO has been notified – should the client exercise their right to see the file, then such a note will obviously tip them off to the report having been made and may render you liable to prosecution.
9.1 The MLRO will evaluate the disclosure and any other relevant information to determine whether:
9.2 If the MLRO concludes that actual / suspected money laundering is taking / has taken place, then unless there are reasonable grounds for non-disclosure, the matter will be disclosed to NCA in the appropriate manner as soon as is practicable.
9.3 Where consent is required from NCA for a transaction(s) to proceed, then the transaction(s) in question must not be undertaken or completed until either:
9.4 The MLRO will keep all records relating to an investigation for at least five years from its conclusion and in compliance with the Data Protection and Freedom of Information Acts and document retention requirements.
The procedures set out in this Appendix apply to company employees conducting ‘relevant business’ (set out below). “Relevant” for the purposes of the legislation is the provision by way of business of:
Where the company is carrying out relevant business (the provision of accountancy, audit and certain legal services ‘by way of business’ to third parties) and:
Satisfactory evidence is evidence which:
Evidence of identity should be obtained as follows:
If satisfactory evidence of identity is not obtained at the outset of the matter, then the business relationship or one off transaction(s) cannot proceed any further until this becomes available.
The law states that particular care must be taken when the person or organisation that is paying you to do work is not physically present when being identified: this can be the case for the company, and therefore instructions will usually be given in writing.
General guidance on money laundering legislation suggests that fairly rigorous identification checks should be made: for example, in relation to an organisation, evidence should be obtained as to the identity of key individuals within the organisation along with evidence of identity of the business entity and its activity.
It is impossible to give a definitive list of ways in which to spot money laundering or how to decide whether to make a report to the MLRO. The following are types of risk factors that may, either alone or cumulatively with other factors, suggest the possibility of money laundering activity: