The AML guidance is basic rules and
regulations stipulated to guide and control legal practitioners when it comes
to the issue of handling money and every other financial involvement. These guidelines
apply across all legal sectors: a sole practitioner, an authorised entity, an
independent legal professional business, a solicitor, and a law firm. Barrister
and advocates are also guided by some not all of the anti-money laundering compliance
policy. For example, the MLRO ( money laundering reporting officer) rules and
organisational arrangements do not apply to advocates and barristers practising
from chambers or as a sole practitioner but will apply to advocates and
barristers working in private practice in entities. Money laundering is a
serious threat to society, resulting in a loss of revenue and a threat to life, even fueling other criminal activities. The AML rules and guidelines are geared
towards assisting independent legal professionals in meeting up with their
obligations as stated in the AML compliance policy ( soon to be unveiled).
Money laundering also involves changing false proceeds to say of a crime into a
legitimate proceeds, it can also be in the form of small profits gotten from relatively
minor crimes; minor tax evasion, regulatory breaches. Money laundering can also
take the form of :
« Placement: this involves putting a cash
generated from crime into a financial system when at the risk of detection, since
these systems ( banks) have developed AML procedures.
« Integration: this done after the source
of an illegitimate fund have been obscured, by investing such funds into
legitimate business and investment such as a property under the supervision of
a legal professional, settling up a trust, acquiring a company or even used in
settling litigation.
« Layering: this involves obscuring the
sources of illegitimate funds by passing them through complex transaction such
as passing it through multiple jurisdictions.
Some of the essentials of the anti-money
laundering policy and regulations in conjunction with the FATF( financial
action task force) include:
ü Imposition of limitations on the amount of payment that can be
made or accepted from a customer- this helps to restrict the amount that can be
deposited by an individual in cases of no transaction deal.
ü Reporting of international transfer of the exorbitant amount of funds
and security: this report is to contain the name, addresses of the sender and
receiver so as to curb cases of falsification of details during financial
transactions of the individuals
involved, such individuals are liable to forfeiting a high percentage of such
funds or even imprisonment.
ü Detailed identification of customers: the KYC ( get to know your
customers) policy is one of the essential guidance in AML policy and regulation,
hence any financial system has to verify its customers and update all relevant
information about the customer from time to time, scrutinize on a regular basis
on-going financial transactions of the customer, taking appropriate measures to
understand the customer ownership structure, the use of necessary risk
procedures and system.
ü Special surveillance on certain transaction especially if such transactions
involves a frequency which is unjustifiable, conditions of usual complexity,
lacking a lawful objective, all these and others can be deemed as suspicious.
ü Preservation of records: the AML guidance and regulations requires
that financial system and designated non-financial system to preserve all financial
records with the appropriate and authorised department, the records of all
customers details store be taken and kept for at least 5 years after the customer
accounts have been closed
ü Communication of information: the AML guidance and regulations for legal
practitioners, MLRO's requires that any information about a customer who is
involve in money laundering should be provided and communicated to the relevant
higher authorities responsible for the prosecution of such fraudulent acts.
ü Creating and arousing of awareness among employees of a financial
system.
These and other rules and guidelines are
prepared to aid cases of money laundering which is so prevalent in financial
bodies and institutions. They are formulated as a guide to all legal practitioners
involved in cases of money laundering either within or In an indirect form, the
MLRO', practice manager, law firm and a host of other legal bodies overseeing
case of money laundering so that it can be well handled and sought out.