Legal Requirements

There are several laws, regulations and directives under the umbrella of the UK as well as global organisations that guide the needs of corporate legal responsibility. These are in accordance with the 3rd and forthcoming 4th EU Money Laundering directives. The relevant laws and regulations are summarised under the headings of the organisations.

Legislation within the UK

  • The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017
  • Proceeds of Crime Act 2002 (as amended)
  • Terrorism Act 2000 (as amended by the Anti-terrorism, Crime and Security Act 2001)
  • The Money Laundering Regulations 2007
  • The Money Laundering (Amendment) Regulations 2012
  • UK Bribery Act 2010
  • Counter-terrorism Act 2008, Schedule 7
  • Financial Sanctions (UN, EU and Office of Foreign Asset Control ("OFAC"))
  • HM Treasury Sanctions Notices and News Releases
  • Criminal Finances Bill
  • Wire Transfer Regulation

European Union Directives

  • Third Money Laundering Directive 2005/60/EC
  • Fourth Money Laundering Directive 2015/849

Inter-Governmental Bodies

  • Financial Action Task Force
  • Transparency International
  • The Egmont Group of Financial Intelligent Units

Guidance Notes

  • Financial Action Task force (40 Recommendations)
  • Money Laundering Regulations 2007: Supervision of Estate Agents
  • Joint Money Laundering Steering Group

The key areas under which companies have obligations in accordance with the above, and where we offer our training services are listed below

Money Laundering Regulation 20
Proceeds of Crimes Act - Sections 327-330
Terrorism Act - Sections 18, 21A

  • Identifying and managing risks in the business effectively
  • Appointing a nominated officer to process disclosures
  • Appointing a Money Laundering Reporting Officer with specific responsibilities
  • Devoting adequate resources to Anti-Money Laundering/Counter-Terrorist Financing (AML/CTF)
  • Senior Management must be fit and proper
  • Mitigating conflicts of interests
  • Understanding the potential personal liability if legal obligations are not met

Money Laundering Regulations 2007 (Section 20 (d))
An individual in the relevant person’s organisation is a nominated officer under Part 7 of the Proceeds of Crime Act 2002(a) and Part 3 of the Terrorism Act 2000(b)

  • Nominated Officer: Receiving and reviewing internal disclosures
  • Nominated Officer: Making external reports
  • MLRO should be able to act on their own authority
  • MLRO: Overseeing the firm’s AML systems and controls
  • Receiving reports of suspicious activity from any employee in the business
  • Considering all reports and evaluating whether there is - or seems to be - any evidence of money laundering or terrorist financing
  • Reporting any suspicious activity or transaction to the Financial Intelligence Unit, e,g. the National Crime Agency ("NCA") or equivalent by completing and submitting a Suspicious Activity Report
  • Asking the NCA for consent to continue with any transactions that they’ve reported, and making sure that no transactions are continued illegally

Money Laundering Regulation 21
Proceeds of Crimes Act - Sections 327-329, 330 (6),(7), 333, 334(2)
Terrorism Act - Sections 18, 21A

Relevant employees should be
  • Made aware of the risks of money laundering, terrorist financing and bribery & corruption, the relevant legislation, and their obligations under that legislation
  • Made aware of the identity and responsibilities of the firm’s nominated officer and Money Laundering Regulations Officer ("MLRO")
  • Trained in the firm’s procedures and in how to recognise and deal with potential money laundering or terrorist financing transactions or activity
  • Staff training should be given at regular intervals, and details recorded
  • MLRO is responsible for oversight of the firm’s compliance with its requirements in respect of staff training
  • The relevant director or senior manager has overall responsibility for the establishment and maintenance of effective training arrangements

HM Treasury Sanctions Notices and News Releases
UN Sanctions resolutions 1267 (1999), 1373 (2001), 1333 (2002), 1390 (2002) and 1617 (2005)
EC Regulation 2580/2001, 881/2002 (as amended), 423/2007 and 1110/2008
Terrorism Act, 2000, Schedule 2
Terrorism (United Nations Measures) Orders 2006 & 2009 (other sanctions lists may apply)

  • Ensure no legal barriers (e.g. government sanctions)
  • Positive and false alerts
  • Comprehensive freezing of funds and economic resources
  • Obligations apply to all firms, not just financial institutions
  • Identification of designated persons subject to sanctions
  • Identification of Politically Exposed Persons
  • Manual / automated checking (ensuring data is robust)
Money Laundering Regulations 20(1)(f), 21
  • Firms must establish and maintain adequate and appropriate policies and procedures to forestall and prevent operations relating to money laundering and bribery & corruption
  • Appropriate controls should take account of the risks faced by the firm’s business
  • Introduce appropriate controls to take account of the risks faced by the firm’s business
  • Maintain appropriate control and oversight over outsourced activities

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