To bring ICB's AML Online platform into line with the Money Laundering Regulations 2017 ICB has revamped the client risk assessment tool. MLR 2017 requires that in depth AML risk assessments are carried as part of a risk-based approach to AML compliance. The revised risk assessment template is designed to ensure that practising members fully assess the risks that a client could be involved in money laundering activity, and accurate completion of the template will help protect you from being used by a client for criminal purposes.
The questions in the template should prompt and help you decide whether your client could be involved in money laundering and should be considered in your day to day dealings with them. Most of your clients won’t exhibit any of the risky behaviours referred to in the questions but, where they do, this should be a red flag and prompt you to exercise caution in your AML compliance and put extra measures in place to ensure you aren’t used to facilitate money-laundering activity. Remember, if you do suspect any money laundering activity you are required to submit a Suspicious Activity Report (SAR) to the NCA.
There have been a number of queries about some of the questions in the new template which are answered below.
AML Online Question: Are non-face-to-face business relationships or transactions made without certain safeguards such as electronic signatures?
There are many professionals who have never met their clients, and actually conduct the business relationship and transactions remotely, and there can be a significant AML risk in these situations. The regulations require a professional to put in place safeguards to mitigate the money laundering risks associated with non-face to face relationships. The regulations give an example of a digital signature as, when properly set up, this provides a degree of comfort that communications have come from a trusted source.
AML Online Question: Is the business relationship with your client conducted in unusual circumstances?
Is your relationship with your client what you would expect given the nature and circumstances of their business? Criminals will seek to make it difficult for a professional to look behind the scenes of their business and hold you at arm’s length. They only tell you what they want you to know, use intermediaries, use complex structures and generally make life difficult, you need to be on your guard if you’re client exhibits these traits.
AML Online Question: Is the customer a legal person or legal arrangement that is a vehicle for holding personal assets?
Criminals will seek to hold assets anonymously, they will use the services of professionals to form companies, trusts, etc. to hold these assets. These assets are often owned by shell companies in foreign jurisdictions using nominee directors, shareholders etc, there is no clue to the identity of the true owner of the asset.
One example of this relates to a two-floor penthouse property in London which was purchased for £160 Million. This property was brought by two holding companies in Guernsey but there are no details of the beneficial owners of these companies, which of course means that these could be in the hands of criminals. This makes this an attractive proposition to wealthy criminals seeking to hide their ill-gotten gains.
Further Reading:
> Recording AML Online
