Please enable JavaScript.
Coggle requires JavaScript to display documents.
AML - secondary legislation (Industry guidance (The duty of vigilance…
AML - secondary legislation
The Money Laundering Regulations 2007 places three main requirements on firms
Administrative: Requiring hem to carry out certain identification procedures, implement certain internal reporting procedures for suspicions and keep records in relation to AML activities
Training: Adequately training staff in the regulations and how to recognise and deal with suspicious transactions
Preventative: Ensuring the establishment of internal controls appropriate to identify and prevent money laundering
It is a criminal offence, liable to a prison term and / or unlimited fine for firms and its employees to fail to comply with the money laundering regulations, although in deciding if an office has been committed, the court must consider whether the firm followed the relevant guidance notes that were available at the time the offence was committed
The Single European Market has also introduced several directives, which must be implemented and absorbed into member state laws by EU Member States. These directives were threefold, to deter criminals from using financial institutions as conduits for money laundering purposes, to allow financial institutions and law enforcement agencies to cooperate and to establish customer identification procedures and record keeping to assist in the detection, tracing and prosecution of those involved in the money laundering process
The training OSP must provide includes taking appropriate measures so that all relevant employees are made aware of the law relating to money laundering and terrorist financing and regularly receive training in how to recognise and deal with transactions and activities that may be related to money laundering or terrorist financing
Industry guidance
In the UK the Senior Management Systems and Controls Sourcebook contains high level guidance
Firms are expected to follow the guidance issued by the Join Money Laundering Steering Group
The JMLSG is made up of the leading UK trade associations in the finance industry. It has not regulatory function. Failure to follow the guidance is not considered to be a beach of regulations
The regulatory authorities in many jurisdictions have issued guidance to assist financial institutions to intercept the regulations and understand their obligations under the primary and secondary legislation
The duty of vigilance provides that institutions should be constantly vigilant in deterring criminals from making use of facilities for the purpose of money laundering. It provides that the duty of vigilance is necessary to avoid assisting the process of laundering and to react to possible attempts at being used for that purpose. The duty of vigilance consists mainly of the following five elements:
Verification
Recognition of suspicious transactions
Reporting of suspicion
Keeping of records
Training
Attorney General v Caversham Fiduciary Services Ltd and Caversham Trustees Ltd and Nicholas Bell (2006)