The impression of cash laundering is vital because it underpins and permits most types of organised crime, permitting crime teams to additional their operations and conceal their belongings. The National Crime Agency (NCA) estimates that there could possibly be a whole lot of billions of kilos laundered within the UK yearly.
As such cash laundering continues to be a high business priority throughout all sectors, much more so for these concerned within the shopping for and promoting of property, with the property sector remaining notably weak as a result of giant quantities of cash which might be laundered in a single transaction.
So, what’s being achieved to fight cash laundering? The Legal Services Affinity Group (LSAG) is made up of each regulatory and consultant our bodies for authorized companies within the UK. It has produced steering on the anti-money laundering (AML) rules, which has been accredited by HM Treasury and is the supply of official steering for these within the authorized sector.
In December, LSAG revealed an vital replace to its anti-money laundering (AML) steering. Unusually, they took the step this time of publishing meant modifications to the identification and verification facet of consumer due diligence because of simply how basic this facet of AML management is.
These modifications will solely come into impact if HM Treasury approval is granted. The proposed modifications will be sure that not only a consumer’s identification is verified however that authorities paperwork verifying the identify, tackle and date of delivery of the useful proprietor are additionally provided. These heightened checks goal to clamp down on properties being bought by an ‘agent’ who merely fronts the transaction however isn’t the beneficiary of it.
In January, schedule 3ZA, which was the previous statutory listing of High Risk Third Countries (HRTC) was repealed. HRTCs will now be outlined as those that are topic to elevated monitoring (‘gray listing’) or to a name for motion (‘blacklist’) by the worldwide Financial Action Task Force (FATF).
The FATF is the worldwide cash laundering and terrorist financing watchdog. It units worldwide requirements that goal to forestall unlawful actions and the hurt they trigger to society. It’s extremely vital that each one actors concerned in property transactions be they lenders, conveyancers or property brokers maintain themselves abreast of those modifications.
Sector threat evaluation
As a regulator, it is our obligation to evaluate the cash laundering threat within the sector we regulate – the authorized sector. Annually, we run this train to assist us and the practices we regulate establish and tackle altering threat successfully. This 12 months noticed us introducing 4 additions to the dangers for the authorized sector:
Proliferation financing – this shaped a part of our threat evaluation this 12 months, and we deemed there to be an publicity threat and have included it within the sectoral threat evaluation.
Emerging dangers – we now have launched info on Electronic Money Institutions (EMIs) which we take into account to be an rising threat in AML.
Client threat issue – we now have launched a brand new part referred to as “period and nature of consumer relationships” to cowl not solely data of the consumer but additionally conditions of high consumer turnover, which is a recognised consumer threat issue.
Changes flowing from the 2023 thematic assessment of Trust and Company Service Provision – the evaluation now displays our conclusions on threat arising from TCSP within the CLC-regulated sector.
AML toolkit
Our AML toolkit is out there to anybody by means of our web site and supplies steering and recommendation to CLC regulated corporations on the way to stay compliant with up-to-date AML rules. There are a variety of sources resembling an AML threat evaluation template, which might be designed to assist practices meet AML necessities.
While cash laundering does stay a menace to companies, it’s vital to watch out for the vary of indicators that may assist establish potential cash laundering, and the necessities on companies to make sure they adhere to probably the most present AML steering.
Remember, when you change into suspicious of cash laundering exercise you might have an obligation to lift it along with your nominated cash laundering officer (MLO) who can advise on submitting a suspicious exercise report (SAR) by means of the National Crime Agency’s new SAR portal.
Stephen Ward is director of technique and exterior relations on the Council for Licensed Conveyancers
