Prevention of money laundering – a brief note
[box type=”info”]”Money laundering” is the process by which the proceeds of crime are made to look legitimate. Originally, it related only to the proceeds of drugs-related and arms-related crimes, but it now relates to the proceeds (however small) of any crime (however minor). It is all too easy to be caught by this wide-ranging legislation.[/box]
Lawyers, estate agents, accountants, auctioneers, and others (including casinos) have had imposed on them stringent requirements by the Money Laundering Regulations and associated legislation. In essence, these regulations require us to check the identities of those dealing with them, check the source of funds used in transactions in which they are involved and report suspicious circumstances to the police. More information is available –
- <brief note> [link to “brief note” re anti-money laundering]
- <detailed note> [Link to PDF]
- <High Value Dealers> [Link to PDF]
In addition to avoiding involvement in money laundering, specific government regulations now require lawyers and other professionals, such as accountants and stockbrokers –
- to investigate the background to transactions in which they are involved
- to report suspicious circumstances to the law enforcement authorities and
- not to disclose to their clients if they make such a report.
- to carry out an extensive range of identification procedures for new clients
If a report is made, the transaction will be delayed while the authorities consider the information.
To minimise the extra cost, delay, inconvenience and risk of a report being made, it is vitally important that you co-operate with us in supplying, promptly on request, proof of identity, background information, and details such as the source or destination of funds relating to any transaction. This will, I hope, avoid any suspicious circumstances arising, and therefore avoid the need for a report to be made.
The particular information and documentation that I will need will depend on each client’s particular transaction and circumstances, but the following will give you an idea of what might be involved –
- Each new individual client will need to prove their identity and address at the outset of the transaction or work. This will usually be by visiting the office to produce
– a document linking a name with a photograph (eg: a current passport or photo-card driver’s licence) and
– documents linking the name with a permanent address (EG: two recent utility bills), though we rarely need these due to our online checks.If a visit to our office with photo ID is not convenient, we can send you a form to take to a local Post Office to prove identity there
- Also, we will need your full, permanent address, National Insurance number, etc. Our <Authority form> [Link to PDF Authority form] covers all this information.
- For every new company client I will need to obtain a copy of its certificate of incorporation and memorandum and articles of association, and details of its officers and shareholders. Proof of identity will also be needed for each officer and significant shareholder, in the same way as for individual clients under item 1 above.
- Do not credit any funds to my bank accounts without my consent – otherwise, those funds may be rejected or frozen, if not by me, then by my bank, which is also subject to the regulations
- I will need to know the source of any incoming funds – again, the <Authority form> [Link to PDF] covers this – and, if they are not coming from the specific client involved –
– who is paying them (that person will also need to provide proof of ID as under item 1 above
– where they will be paid from and
– why they are being paid for that client’s benefit.
- If I am asked to send any funds to someone who is not the relevant client or otherwise clearly involved in the transaction, I will need to know why they are to be sent to that person and have proof of their ID as under item 1 above
We realise that completing the extra paperwork and answering the extra questions involved in complying with the money laundering legislation will be irritating and time-consuming for both you and us, but please remember that co-operation should keep both of us out of trouble with the authorities!