Money Laundering

At AHACCOUNTANTS, we understand the complexities of money laundering regulations and how they impact businesses in the Nottingham area. Our team can provide guidance on compliance and related matters.

Understanding Money Laundering

Traditionally, money laundering has been associated with high-profile criminals or drug trafficking. However, over the past two decades, the definition has broadened significantly. Money laundering now includes the proceeds of any criminal offense, regardless of the amount involved.

Key Legislation

The main pieces of legislation governing money laundering include:

• The Proceeds of Crime Act 2002, as amended by the Serious Organised Crime and Police Act 2005.
• The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, as amended.

The Proceeds of Crime Act

This Act redefined money laundering to cover the proceeds of any crime and established mechanisms for investigating and recovering these proceeds. It also consolidates the requirement to report any knowledge, suspicion, or reasonable grounds to suspect money laundering.

The 2017 Regulations

Initially effective from 26 June 2017, these Regulations provide detailed procedural requirements for those affected by the legislation and have been updated to include aspects such as beneficial owners and high-risk third countries.

Who is Affected?

The legislation applies to a wide range of professionals and businesses in the regulated sector, including:

• Credit institutions
• Financial institutions
• Auditors and accountants
• Legal professionals
• Estate agents
• High-value dealers
• Casinos

Compliance Requirements

Businesses within the regulated sector must implement procedures to:

• Identify and assess money laundering risks.
• Apply customer due diligence (CDD) procedures.
• Keep appropriate records.
• Appoint a Money Laundering Nominated Officer (MLNO) to manage reports.
• Train employees on money laundering awareness.

Customer Due Diligence (CDD)

For those operating in the regulated sector, CDD procedures must be undertaken for both new and existing customers. This includes verifying customer identities and understanding their circumstances and business relationships.

Enhanced Due Diligence (EDD)

EDD must be applied in higher-risk situations, such as transactions involving politically exposed persons (PEPs) or high-risk third countries.

Reporting Obligations

Businesses in the regulated sector must report any suspicion of money laundering to the National Crime Agency (NCA). This includes knowledge or reasonable grounds to suspect money laundering activities.

Vulnerability to Criminal Activities

Certain businesses, particularly those that deal with significant cash amounts, are more vulnerable to money laundering. Regulations require high-value dealers to implement anti-money laundering procedures and register with HMRC.

The Risk of Tipping Off

“Tipping off” is an offense under the Proceeds of Crime Act. It occurs when a person reveals that a suspicious activity report has been made, potentially compromising an investigation.