Money Laundering
Money laundering is a global phenomenon, which affects all territories in varying degrees. It has long been an offence in the UK and the events of September 11 have brought the problem to the fore.
Money laundering is defined as the process by which criminals attempt to conceal the true origin and ownership of the proceeds of their criminal activity. If undertaken successfully, it allows criminals to maintain control over the proceeds of their criminal activity and, ultimately, to provide a legitimate cover for their sources of income. Such activity includes drug trafficking, terrorism, theft, fraud and tax evasion. It is an offence, therefore, to provide assistance to a criminal to obtain, conceal, retain or invest funds if you know or suspect that such funds are the product of a criminal activity.
The provisions for the prevention and detection of money laundering have been extended and strengthened by the Proceeds of Crime Act 2002 and the Money Laundering Regulations 2003. An important feature of the new regulations is that the proceeds of any crime will come within their scope if they are laundered and detected in the UK, irrespective of where in the world the criminal activity took place.
The majority of the revisions arise from the Money Laundering Regulations 2003, which have yet to be laid before Parliament. Once the legislation has been passed by Parliament, it will come into force three months thereafter. It is therefore unlikely that it will be in force before February/March 2004. ACCA's Rulebook has nevertheless incorporated the requirements and these come into force on 1 January 2004.
The obligations placed on firms include:
- putting into place systems, controls and procedures to ensure that your firm is not used for money laundering purposes
- appointing a Money Laundering Reporting Officer
- establishing/enhancing the recording keeping systems for all transactions and for verifying the identity of clients
- establishing suspicion reporting procedures within the firm
- training and educating staff.
It should also be noted that, in some cases, a lead regulator such as the FSA has the power to take action against any firm or individual for non-compliance, irrespective of whether the firm or the individual is regulated by it. All this is in addition to any disciplinary action you may be subject to by ACCA. It is, therefore, important that you clearly understand your obligations.