Placement:
The process of placing criminal property into the financial system. This might be done by breaking up large sums of cash into smaller amounts or by using a series of financial instruments (such as cheques or money orders) which are deposited at different locations.Layering:
The process of moving money that has been placed in the financial system in order to obscure its criminal origin. This is usually achieved through multiple complex transactions often involving complicated offshore company structures and trusts.Integration:
Once the origin of the money is disguised it ultimately must reappear in the financial system as legitimate funds. This process involves investing the money in legitimate businesses and other investments such as property purchases or setting up trusts. We are most likely to become involved in the layering stage but potentially could be involved in any stage.
Failing to make a SAR to the Nominated Officer where you know or suspect money laundering is an offence in itself which is punishable by up to five years' imprisonment, a fine or both.
Risk assessment
MPs judiciary whose decisions are not generally subject to further appeal members of courts of auditors or the boards of central banks Ambassadors
high-ranking officers in the armed forces members of administrative, management or supervisory bodies of state-owned enterprises family members or close associates of the above
When
am I required to look into the source of funds in a transaction?
You
are not required to interrogate all clients about their entire
financial history but you are required to take additional steps to
ensure that the transaction is consistent with your knowledge of the
client. This is part of the ongoing monitoring exercise which you
must conduct on all matters; see further Ongoing monitoring below.
What
steps should I take?
Scrutinising
the source of funds is more than asking for the money to come from a
bank account in the clients' name. Your focus should be on
understanding how the client can legitimately fund the transaction.
Body corporate (including LLP) |
Any individual who: (For non-listed bodies) ultimately owns or controls more than 25% of the shares or voting rights of the body, or Otherwise exercises control over the management of the body |
Partnership (not LLP) |
Any individual who: Ultimately is entitled to or controls more than a 25% share of the capital or profits of or more than 25% of the voting rights in the partnership, or Otherwise exercises control over the management of the partnership |
Trust |
Any individual who is entitled to a specified interest in at least 25% of the capital of the trust property The class of persons in whose main interest the trust is set up or operates (the class itself and not every member of the class), or Any individual who has control over the trust |
Other legal entity or arrangement |
Any individual who benefits from at least 25% of the property of the entity or arrangement The class of persons in whose main interest the entity or arrangement is set up or operates (the class itself and not every member of the class), or Any individual who exercises control over at least 25% of the property of the entity or arrangement |
Estate of a deceased person in the course of administration |
The executor or administrator |
Any other case |
The individual who ultimately owns or controls the client or on whose behalf a transaction is being conducted |
Where we are unable to apply CDD measures, the general rule is that we must:
All relevant staff will receive training.
You can get further advice and guidance from the Nominated Officer, Octav Funar, or, in his absence the deputy, Relu Iliescu.
Appendix 1
Internal Suspicious Activity Report Form
SAR
Reference Number: |
|
(Nominated Officer use only)
A
record of this SAR will be kept by the Nominated Officer for five
years
You
must use this form in every case where you know or suspect that
another person is engaged in money laundering or terrorist financing
If you are unsure as to whether you have such a suspicion, please do not use this form but instead seek guidance from the Nominated Officer
General
all
sections)
Date SAR submitted to the Nominated Officer |
|
Your name |
|
Branch/office |
|
SAR type (money laundering / terrorism / mortgage fraud / bribery) |
|
Client name |
|
Client/matter reference number |
|
Department dealing with the matter |
|
Do you require consent to continue acting? |
|
If yes, set out all color="#000000"> the steps that you need to take to complete the matter in section 4 below |
|
Does this SAR relate to a previous SAR? |
|
If
yes, please provide details
|
|
Details
of the main subject of this SAR (complete as much as you are able)
Does this SAR relate to a suspect or a victim? |
|
Is
the subject of this SAR:
an
individual--please go to section 3
a
legal entity--please go to section 4
|
|
Are
there any individuals or entities who are associated with the main
subject? (yes/no)
If
yes, complete details in section 5 below
|
|
Individual
Full name |
|
Date of Birth (dd/mm/yyyy) |
|
Gender |
|
Occupation |
|
Full address |
|
Address type (home/business/other) |
|
Is this address current? (yes/no/unsure) |
|
Any other identification details (eg passport, driving license or NI number) |
|
Legal
entity
Full name |
|
Company number |
|
VAT number |
|
Country of registration |
|
Full address |
|
Is this address current (yes/no/unsure) |
|
Type of business |
|
Any other identification details |
|
Associated
subjects (complete if appropriate)
Details of any associated subjects including identifying information as above and details of the nature of the association with the main subject |
|
Details
of knowledge/suspicion
Does your knowledge or suspicion relate to a specific offence? (yes/no) |
|
If yes, please indicate: drugs/fraud/terrorism/briber/other (please state) |
|
Have you discussed your knowledge or suspicions with any person other than the Nominated Officer? (yes/no) |
|
If yes, please give details (who/why/when, etc) |
|
Please set out your reasons for making this SAR in as much detail as possible (who/what/where/when/how/why) |
|
Signed
(discloser) |
|
Signed (Nominated Officer) |
|
Appendix 2
Client Due Diligence Risk Tables
These tables are a guide only. You should assess the risk presented by each individual client and complete the client due diligence risk assessment form. Where any characteristics of a client appear to present a higher risk, you must factor this into the client due diligence process.
Key
terms |
|
CDD |
client due diligence |
EDD |
enhanced due diligence |
EEA |
European Economic Area |
PEP |
politically exposed person |
RDD |
regular due diligence |
SDD |
simplified due diligence |
1. Natural
persons
Client
type |
Basic requirement |
Client
color="#000000">
not
physically
met |
Client
is a PEP |
Required
to establish
beneficial
|
UK individual |
RDD |
EDD |
EDD |
no |
overseas individual |
RDD |
EDD |
EDD |
no |
agent or representative of an individual |
RDD |
EDD |
EDD |
yes |
professional |
SDD |
EDD |
EDD |
no |
PEP |
EDD |
EDD |
EDD |
no |
2. Partnerships
and companies
Client
type |
Standard
requirement |
If
a PEP is involved |
Required to establish beneficial ownership |
UK credit or financial institution |
SDD |
EDD |
no |
credit or financial institution in the EEA |
SDD |
EDD |
no |
credit or financial institution outside the EEA where equivalent AML provisions apply |
SDD |
EDD |
yes |
credit or financial institution outside the EEA where there are no equivalent AML provisions |
RDD |
EDD |
no |
UK partnership |
RDD |
EDD |
no |
UK partnership made up of regulated individuals |
SDD |
EDD |
yes |
UK private unlisted company |
RDD |
EDD |
yes |
well-known 'household name' company |
SDD |
EDD |
yes |
subsidiary of existing private unlisted company for which CDD has been conducted |
SDD |
EDD |
yes |
UK company listed on a regulated market |
SDD |
EDD |
no |
subsidiary of a UK listed company |
SDD |
EDD |
yes |
private unlisted company in the EEA |
RDD |
EDD |
yes |
private unlisted company outside the EEA |
EDD |
EDD |
yes |
overseas company listed on a regulated market |
SDD |
EDD |
no |
companies with capital in the form of bearer shares |
EDD |
EDD |
yes |
3. Other
entities and arrangements
Client
type |
Standard
requirement |
If
a PEP is involved |
Required to establish beneficial ownership |
standard-risk trust |
RDD |
EDD |
yes--when acting for trustees |
higher-risk trust (eg a high-risk jurisdiction is involved) |
EDD |
EDD |
yes--when acting for trustees |
foundation |
RDD |
EDD |
yes |
registered charity |
SDD |
EDD |
yes |
small, unknown or obscure or unregistered charity |
RDD |
EDD |
yes |
deceased person's estate |
RDD |
EDD |
yes |
church or place of worship |
SDD |
EDD |
yes |
school or college |
SDD |
EDD |
yes |
club or association |
RDD |
EDD |
yes |
employee pension fund |
SDD |
EDD |
no |
other pension fund |
RDD |
EDD |
yes |
UK public authority |
SDD |
EDD (but only if overseas PEPs are involved) |
no |
overseas
public authority that:
is
entrusted with public functions
has
publicly available, transparent and certain identity
has
transparent activities and accounting practices
is
accountable to a community institution, the authorities of an EEA
state or is otherwise subject to appropriate check and balance
procedures
|
SDD |
EDD |
no |
other overseas public authority |
RDD |
EDD |
yes |
other overseas public authority in high-risk jurisdiction (eg Iran and North Korea--the Treasury issues guidance and lists periodically that are available on its website, the most recent being March 2012) HM Treasury--Financial Sector Advisory Note |
EDD |
EDD |
yes |
Appendix 3
Client Due Diligence Risk Assessment Form
You must complete this form for every:
new client, and
existing client where there has been a gap in retainers of three years or more
The
client
Client name |
|
Client reference number |
|
Is the client based in the UK? |
|
Client type (private individual/partnership or company/other) |
|
Has client been met face-to-face? (individual clients only) |
|
Is the client a PEP? (individual clients only) |
|
Client
risk indicators
Please tick any of the following indicators that apply to your client.
|
High |
|
Low |
|
Standard |
PEP |
|
professional individual or partnership |
|
client does not fall within high- or low-risk categories |
|
individual not met face-to-face |
|
credit or financial institution |
|
other (please state): |
|
high-risk trust |
|
'household name' |
|
|
|
high-risk jurisdiction |
|
listed company or subsidiary |
|
|
|
company with capital in the form of bearer shares |
|
registered charity, place of worship or school/college |
|
|
|
other (please state): |
|
employee pension fund |
|
|
|
|
|
public authority |
|
|
|
|
|
other (please state): |
|
|
|
What
is your conclusion regarding the risk posed by the individual client
- low/standard/high?
Note: it is possible that more than one indicator will apply. If so, the highest indicator will prevail--eg if you have ticked one low indicator and one high indicator, you should conclude that the client is high risk.
What
level of client due diligence is indicated by the CDD risk table?
enhanced |
simplified |
regular |
What
level of CDD do you propose to apply to this client?
Remember that the CDD risk table is a guide only. Before deciding on the level of CDD to apply, you should take into account your assessment of the risk posed by the individual client at section 2 above, eg where the client is high risk, you should consider upgrading the level of CDD suggested on the table.
enhanced |
simplified |
regular |
If
your answer to question 4 is different from your answer in question
3, state why:
Reason:
Signed:
Date:
Signed by Nominated Officer () (high-risk clients only):
Date:
Please return completed forms to MLRO and retain a copy for the matter file.