Money Laundering

Felicity BanksHead of Business Law,

ICAEW

ICAEW

2007 Regulations – What has changed?

ICAEW

2007 Regulations – What has changed :

Nothing Much

ICAEW

2007 Regulations – What has changed :

• Requirement to be supervised• Risk based approach (risk

assessment and implementation)• Tightening of due diligence (PEPs,

beneficial owners …)• Removal of gold plating (changes in

wording of Regulations)

ICAEW

Systems Requirements

• Customer due diligence – ID for new clients• Record keeping• Reporting procedures• Communication and training• Establish and maintain systems appropriate

to forestall and prevent money laundering ….

ICAEW

Systems Requirements

• Customer due diligence – ID for ALL clients

• Customer due diligence – Continual monitoring

• Risk Approach – Risk profile for firm- Risk based CDD

• Monitoring and management of

compliance

ICAEW

What to Report?

• Any crime which has resulted in proceeds (even if small)

ICAEW

What to Report?

• Any crime which has resulted in proceeds (even if small)

–Not attempted fraud or theft that did not come off–Not tax evasion, until after the tax

should have been paid and was not

ICAEW

What to Report?

• Any crime which has resulted in proceeds (even if small)

–Not unlawful but non-criminal behaviour even if redress could be due–Not parking fines (unless it is a criminal

offence in Guernsey not to pay them)

ICAEW

What to Report?

• Proceeds of any crime which the suspect knows or suspects has happened

If a client does not know that he has stepped the wrong side of the law, there is no possibility of money laundering (until you tell him)

ICAEW

Risk based CDD

“On the basis of documents, data or information obtained from a reliable independent source”

• Specific provisions on some points

• Otherwise, based on the firms’ own risk assessment

ICAEW

Risk based CDD

• Politically Exposed Persons• Client not present• Beneficial ownership

------------------• “Normal Risk” clients• Existing clients• Reliance on others

ICAEW

GUIDANCE AML Guidance for the Accountancy Sector• Prepared and Issued by CCAB• Addressed to accountants, auditors,

tax advisers, insolvency practitioners, trust and company service providers in the UK• Available from www.ccab.org.uk

ICAEW

GUIDANCE

AML Guidance for the Accountancy Sector

• CIoT and other supervisory bodies also apply this Guidance in the UK.

• Channel Isles authorities also welcome to use it.

ICAEW

OTHER CHANGES

• Privilege reporting exemption• Electronic ID• The Confidentiality of SARs• More Representations • Etc. etc.

ICAEW

OTHER UK GUIDANCE

• CIoT - www.tax.org.uk/

• JMLSG - www.jmlsg.org

• SOCA – www.soca.gov.uk

• ICAEW -www.icaew.com/moneylaundering

ICAEW

What is it all about?

ICAEW

What is it all about?

• The process by which criminals retain, disguise and conceal the proceeds of their crimes• The process by which funds are

raised, consolidated and retained for use in financing terrorism

ICAEW

What is it all about?

IFAC - Introduction and Fundamental Principles

• 100.1 A distinguishing mark of the accountancy profession is its acceptance of the responsibility to act in the public interest.

ICAEW

What is it all about?

• Professional accountants provide relevant information to those entitled to it, enabling them to perform their legitimate functions

ICAEW

What is it all about? • Professional accountants provide

relevant information to those entitled to it, enabling them to perform their legitimate functions • All society benefits when fair laws

are enforced fairly. • Accountants should assist law

enforcement by reporting money laundering

ICAEW

What is it all about?

• To report effectively and professionally, you need to:– have systems to ensure the

whole firm knows what they are doing, and do it– know who your clients are, and

roughly what they are doing

ICAEW

AML – What is it for:

ICAEW

AML – What is it for:

• Not just organised crime and terrorism – also the proceeds of crime more generally, including tax evasion

ICAEW

AML – What is it for:

• Not just organised crime and terrorism – also the proceeds of crime more generally, including tax evasion

• But Al Capone was jailed for tax evasion – don’t underestimate the value of your money laundering suspicion reports

Money Laundering

Felicity BanksHead of Business Law,

ICAEW