I am sure that most of us will be glad to see the back of 2020. It has been a dark and peculiar year, and many will be up for celebrating a Christmas like no other, being far away from loved ones and perhaps having to put a budget on the festivities this year. However, even though we are all feeling festive, thinking of relaxing at home over Christmas with all the trimmings, we wonder what criminals are looking forward to?
Whilst it can be difficult to predict how money launderers might target your business over the Christmas period, but here are a few red flags which you need to be looking out for.
- Secretive Clients
Businesses should have client due diligence procedures designed to ‘know your client’. A client who is or becomes reluctant to share information with you, may become a red flag for money laundering. As an organisation you will need to ask for some sort of identification before pursuing, and in some cases their financial history. A client who does not comply and refuses to provide you with this information may be trying to hide that they have illegitimate funds they do not want to discover, If you do consider them as suspicious you must report it to your money laundering officer.
- No connections
As a business, referrals are important as this builds up more clientele. A business should always ask clients ‘where did you hear about us? Many clients come from previous clients or an introducer of work. In some cases, if a new client comes and there is no obvious connection, you need to ask yourself why. Money laundering can come from any angle, are your new clients targeting your firm because they think you won’t spot they are money laundering?
- Third Party Funding
Using a third party within any sector is becoming more and more common. Especially in the property market as property prices increase. Criminals try to launder money through third party funding because they think you will only carry out due diligence on the client dealing with the business, not a third party. If a third party wishes to do business, you should consider the risk of money laundering and whether you should conduct any checks on them.
- Giving without asking for information
A client who provides the information you need without being asked, could be an indication of a red flag. Criminals are smart people, and tend to believe they are one step ahead of the business they are trying to money launder from. So, they are likely to know what information you will ask for, in order to rush the matter through without having the proper checks needed.
- Last Minute changes
Criminals will often try and get around checks by changing the source of the funding at the last minute, Thus doesn’t give the business enough time to do proper due diligence on the funds before receiving them. If this does occur you should make enquiries and consider whether you are suspicious that this is money laundering.
Criminals do not stop over Christmas, so neither should your AML procedures. AML & Compliance will develop with your businesses strategies to ensure that your policies and procedures are in place.
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