E2: Money Laundering Regs 2007 - created from Mind Map

Businesses covered credit/financial institutions auditors/accountants/tax advisers/insolvency practioners Independent legal professionals trust/company service providers estate agents casinos high value dealers (goods value greater than 15k euros leasing companies/commercial finance providers/safe custody services

policies & procedures appoint MLRO exist to minimise risk covers due diligence reporting record keeping internal control risk assessment monitoring of complaince

Customer due diligence verify ID of customer & beneficial owner obtain info on purpose/nature of business relationship req'd? not required? reg. firm establishes bus relationship carries out occasional transaction suspects money laundering/terrorist financing doubts about integrity of customer info life policy annual premium pension sv cannot be used as collateral for loan pension scheme members cannot assign right

- took effect Dec 07 - implement req's of 3MLD - interpretation of regs by Joint Money Laundering Steering Group (Chaired by Bank of England & including leading Trade Assoc.) - risk-based approach assessed by firms/practioners to extent of complaince work they need to carry out

- life ass. cos - fin advisers - savings & invstmnt firms - deposit takers - bureaux de change

- based in UK - level of authority & independence within firm - access to sufficient resources & info to carry out responsiblities

further enhanced CDD where customer is not present for transaction to establish i.d: additional docs confirmation from appropriate financial institution payment through acct. with credit institution in customer's name Also applies to politically exposed person from outside UK.Ongoing monitoringReg firms obliged to conduct ongoing monitoring of bus relationships.

I.D. procedurestwo stage process:  name, address, dob reliable independent docs or info acceptable docs agreed by JMLSG: gov't issued doc with full name & photo with dob, or residential address (passport/ photocard driving license/national ID card or firearms cert) if no photo, 2nd evidence of address req'd such as utility bill, bank/b.soc statement/mortgage statement from recognised lender.  Home visit from staff member may constitute evidence sufficient checks must be done (spelling of name, photo likeness, matching addresses) for clients who are not individuals - company reg. no., registered address, etc.

EnforcementInclude right to enter, inspect, and take copies of docs.  Designated authorities may impose 'appropriate' civil penalties (being effective, proportionate, dissuasive).Partners/directors may be fined if personally responsible (amount not exceeding statutory max) up to two years imprisonment, or both.Firm annual reportingNeed for annual review of systems & processes by obtaining report from MLRO.

Record KeepingMust keep records for 5 years after end of customer relationship or 5 years from when transaction complete.Originals/copies/e-copies allowed.RegistrationIf not already authorised under FSMA must register with appropriate money laundering supervisory agency (OFT for estate agents)Protection MeasuresSOCA will protect person who reports.  Outside of investigation, names will be concealed and they will not be called to give evidence.Civil RecoveryProceeds of Crime Act established Assets Recovery Agency (ARA) to confiscate criminals proceeds of crime.  Wide powers to obtain financial info in relation to life policies & other invstmnts.  Could also take over HMRC's function to tax profits or gains of criminal conduct.

E2: Money Laundering Regs 2007

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