Learning Material Sample
Financial crime10. Client Identification
The Money Laundering Regulations stipulate that, in the majority of cases, a relevant (i.e. registered) person “must verify the identity of a customer before the establishment of a business relationship or carrying out an occasional transaction.”
The regulations do not stipulate the specific information and documents that need to be obtained although comprehensive guidance is provided by the Joint Money Laundering Steering Group. In addition, in accordance with the Money Laundering Regulations, JMLSG guidance does not stipulate that identification is required for every transaction carrie... Shortened demo course. See details at foot of page. ...may be problematic for some. If an individual is not able to produce evidence of his/her identity then a responsible person such as a solicitor, doctor etc who knows the client can confirm their identity and permanent address if they have one.Factors which are identified as increasing risks where formerly a low-risk was diagnosed include: A change of name Inconsistent or uncharacteristic behaviour or transactions Unexplained changes to service requirements Each firm will have its own policy so it is important for staff to know and remember what their organisation’s procedures are. Companies can be popular vehicles for money laundering as the inherently complex arrangements can sometimes make it difficult to tell who owns the company. As a result, care should be taken when verifying the detail...
Shortened demo course. See details at foot of page. ...formation service; ORAn undertaking from a firm of lawyers or accountants confirming the documents have been submitted to the relevant registry Identification of those with 25% or more controlling interest A central register of charities is held by the Charity...
Shortened demo course. See details at foot of page. ...o ensure that at least one signatory has been verified. Verify the purpose of the club or society and an address. Follow similar procedures as registered charities for checks ...
Shortened demo course. See details at foot of page. ...se of the club or society and an address. Follow similar procedures as registered charities for checks on signatories.. The Joint Money Laundering Steering Group (JMLSG) is an organisation made up of a number of trade associations from the Financial Services industry, these include:
The Association of British Insurers (ABI) UK Finance Building Societies Association (BSA) Investment Association (IA) British Private Equity and Venture Capital Association (BVCA) The Investing ... Shortened demo course. See details at foot of page. ...ty verification.Where the client is remote and original documentation cannot easily be obtained then the use of electronic identification is much more robust. Alternatively the firm would need to use an arrangement whereby the client takes the documents to be verified by an approved third party. Using email and scanned copies may not be satisfactory in managing risk. This is required in a defined list of situations summarised as follows:
High-risk of money laundering or terrorist funding High-risk country of residence or connections with such Politically exposes persons, their family members or close associates Any case where fraudulent, false or stolen identity documents are produced Complex, unusual or seemingly pointless transaction requests As a minimum EDD consis... Shortened demo course. See details at foot of page. ...ominee shareholders, shadow directors or formation of companies in third countries (the UK might be one of these soon!)Geographic Countries without credible anti-money laundering regimes Countries where there is a significant level of corruption Countries subject of EU or UN sanctions Countries where there is known funding or support for terrorists Countries where terrorist organisations are located Politically Exposed Persons are:
Heads of state Government ministers and their deputies or assistants Members of Parliament (or equivalent) Regional MPs (not... Shortened demo course. See details at foot of page. ...iblings should also be considered.Close associates are defined as any people having joint interests, for example common directorships or beneficiary arrangements. It helps to understand the factors that create higher risk as they may also apply to people who are not PEP, there factors are: <...
Shortened demo course. See details at foot of page. ...products and services are also lower risk than others. The objective is not to deny straightforward products and services to PEP. The FCA has stated that the FOS & FSCS will still apply to a PEP and offer guidance for dealing with PEP in its Finalised Guidance (FG) 17/6.
Firms should undertake the following when confronted with PEP: Take appropriate measures Review on a case by case basis Be proportionate about who is a PEP Recognise that the same type of risks could applied to non-PEP Risk manage and monitor with appropriate systems and controls Many firms will never come across PEP in ... Shortened demo course. See details at foot of page. ...rit (this could be a tricky judgement call!)Care should be taken around the beneficiaries of any long-term insurance products particularly, before proceeding to place cover. Note that the practise of getting prospects and clients to sign a PEP disclaimer does not fully address the issue and should not be relied upon. For most firms this might be considered unnecessary. What is the aim of the Joint Money Laundering Steering Group (JMLSG)? Answer : Purchase course for answer |
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