Signs your business is being used to launder money

AML (Anti Money Laundering) and Compliance

Anti Money Laundering – Signs your business is being used to launder money.  

It is well reported that UK businesses do and can be caught up with money launderers seeking to use the business, its services and products to launder money.

For many businesses, there is a requirement to register with their regulator or HMRC for regulation and compliance with the Anti Money Laundering Regulations 2019. Failure to do so is a criminal offence.

The majority of money laundering scams happen without the willingness or knowledge of business participants. Despite involuntary involvement, this still means that the business and its employees are subject to investigation as they are guilty by association if they have not performed appropriate due diligence and complied with the requirements of the regulations.

A robust Anti-money laundering policy is expected to be carried out and exercised by all employees. Failure to do so can have detrimental repercussions on the business and the employee/es in question.

You can prevent this through ensuring your business has written Policies, controls and Procedures a process for Customer Due diligence and training programs ensure staff at all levels are well informed and possess the knowledge to be able to spot one of these scams before it is too late is crucial.

Here are four fundamental things to look out for to help prevent money laundering within your business.

Evidence of funds

When taking on a new client, it is common sense to look into their financial situation and how the funds they possess were obtained. Before looking at the documentation, some questions can be asked that will reveal key indications that something is not right. For example, you are required to establish how an individual or business has obtained the money which they propose to transact through your business. Asking them to prove the source of wealth can be as simple as seeking details of employment and confirming that the funds are paid into their account and are in keeping with their earning levels.

Accidental over payments

It is not uncommon for a client to have the details to make payments to a business on their own accord. This also means that a customer could make an overpayment or accidental payment to a business and then simply request the money back as it was an “accident”. Once funds have been refunded to the client, a potential laundering act has been carried out. If a client ever sends money to a business “unintentionally” or “by mistake”, then it should be reported to the business’s Money Laundering Reporting Officer (MLRO)

Forged documents

The art of forging documents has fast developed over the years. It is an industry in itself and requires a high level of skill and meticulousness to spot a fraudulent or tampered with document. Criminals will often favour foreign documentation when attempting to scam or deceive a law business. The main reason for this is due to the fact these forms of documentation hold some level of unfamiliarity along with language barriers.

It is imperative that a credited translator is used when accepting foreign documentation as identification. Many businesses have also started to introduce Electronic ID Verification to establish if a document has been tampered with or forged. Such systems provide companies with an excellent layer of protection.

Client confidentiality

With confidentiality comes a level of trust between a business and their clients. While it is expected that confidentiality is respected when handling a transaction, there is also a responsibility to report any forms of money laundering to the correct authorities if it is revealed that your client Is participating in this illegal activity.

Failure to report any indications or suspected illicit activity is illegal and a breach of the Proceeds of Crime Act.

Our Compliance Services

If you are concerned that your current AML policy is out of date or not robust enough or to review your processes and train your staff, please get in contact with our team of experts that have years of experience in this field.

We will work with you to create bespoke and specialist policies that are tailored to your company and we will help to educate your staff on their obligations.

Call us on 0203 985 8553 or click here for more information about our services.