Introduction to AML

Hello. I'm welcome. Teoh Today's webinar on introduction to Money. And so this Webinar needs about thinking about basic points. An introductory points. Anybody who's starting out thinking about when all you has had some training in the past, but maybe hasn't had any for a long time. He's in a position where they need Teoh getting of the process dating with money laundering. So thinking about checking identity documents on checking the risk assessments, those kinds of things in order to facilitate wider process within or for money. I know. Sketch Jackson. I'm a consultant, and I'm recording this webinar for data. This session is suitable for anybody who might be in a support stuff, the only role who is thinking about how they can contribute to the process within the firm. And if you're cope coffer, you might prefer or a money order reporting up, you might prefer Teoh. Have a look at some of the other weapon also recorded on advanced money laundering. If you'd like further information on anything that's in today's weapons, we're gonna cover a few different things in a very general way as a really an introductory sort of more detailed, potentially a weapon. So what we're going to convert in today session is what is money laundering? We're gonna talk about that. We're going to have a look at highlights above money laundering regulations 2017 which came in last day, which given, nor firms processes what they need to put in place ball onto when your laundry requirements on why people are so concerned about people. Put those things in place. We're also going to have a look at your options for checking i d. And the importance off dealing with. I'm thinking about that processes and on ideas, concepts such as know your client what that means. In addition to that, we're also gonna have a think about some of the key concerns. Been anti money laundering around moments, some of the main scams. So what we mean by money laundering? Well, Jonathan Fisher QC is provided a helpful definition, and he says it is, and I'm going to read this studio process of concealing the illegal origin of the ownership of property by making the property or sources of the property appear legitimate. So what we mean by that is taking something which is the proceeds of a crime Andi alternatives away to make it seem as if it's perfectly legitimate on law firms, a particular target for doing this because they are concerned with making sure that people are putting their money into property, facilitating investments. Facilitating commercial property is not stupid ways in which a criminal could use a client account transfer. Everybody is a criminal origin into another form of property. Law firms have a good reputation. People respect solicitors, so they're easy talking. We got a criminal. He's got some money, some cash come in from some dodgy dealings that they've been doing. They might think it's very attractive to try to purchase a house with that ALS form some form but the form of investment and therefore they may try toe launder the money in that Why so laundering means cleaning proceeds off those of that crime. In order to have money laundering, you must first have criminal money. You know the proceeds of a condom aspired to be a criminal offence. The concern about money laundering is posting that it's helping hide when crime has taken place on it is probably being used potentially to refund for the criminal activity as well. Could be in the future on DSO, it could be used for terrorist financing. It could be used for organized criminal gangs that could be lots of different outcomes. They say that there's hundreds of billions of pounds loaded in UK every year, more $0.6 trillion lorded worldwide. So a lot of money passing through banks passing through potentially client can that's being laundered, being put into investments. And there is likely to be law firms involved in that. Statistically on what they say is in any one year giving stats there. The National Crime Agency for the number of suspicious activity reports May I'm not. Number is 312,008 on 882. Lots of people make reports, and if you've got concern about money laundering, are you can make a report internally to your money laundering reporting officer money laundry reporting officer can then make you ever put their concern, too. They National Crime Agency, who will give them consent to proceed with the transaction if it's appropriate to do so, or tell them to decline the transaction. And so if we move onto the next line, the process may look something like this. They might be in anti money laundering concern that comes upon falls with clients. If that's the case, then you can report your concern to the money laundering reporting officer. The money or drew important then makes a decision as to whether to make a report to the National Crime Agency. And if they do say that committee report on the money laundering reporting officer will get some feedback to say whether or not they can go ahead with transaction, whether the firm could go ahead with the transaction or not. If you do make reports, the National Crime Agency, you'll be given some guidance, most likely by your money laundering reporting, say, if they're going to make reports about what can be told to the client, and it's been like dating with an insurance matter something else, I will be restricted information potentially that could be provided to the kind and mine I need to be passed to somebody else in order for them to deal with the situation. So there's something called tipping off on DSO. If you're in a situation where you have made report, there's a money or investigation ongoing, you must provide any information about that to climb because there is an offence school ticking off. That's where you can pretty this the outcome of an investigation by telling the person who's subject to that investigation. Okay, so let's have a think about what the money laundering regulations say. There's a set of regulations out there called the Money Laundering Regulations 2017. They replace a previous set of regulations called Money Laundering Regulations 2007. Andi, instead of a new set of regulations, sets you wide standards for how people could look to deal with money laundering. Concerns on what is expected off business is dealing with money on their concern is that there should be the appropriate processes and procedures in place for dealing with money on, as a result of that, the new money laundering regulations, which came into force last year because firms have detailed purposes in procedures in place to support their stuff when dealing with money so internally within your firm, you should have a full set of processes and procedures that tell you have to check identity documents, for example, how to conduct a risk assessment to be applied to the beach transaction on how to deal with any money laundering concerns, and I would encourage you to go away and have looking your office manual or whatever information is contained. So familiarize yourself with your own internal processes and procedures that will be very important to money, to making sure that you understand what happens internally in respect of money. There are some important appointments or money laundering. So we've mentioned the money or the reporting officer. Your firm will have a nominated person for whom it's responsibility to make a report to the National Crime Agency. Should the need arise and that person is called the reporting officer, it is an important appointment, and it's contained within the requirements off the money laundering regulations. In addition to that, as further appointments be made, sometimes you find deputy money laundering reporting offices. Sometimes you might find on nominated officers among your drink officer instead. So somebody used their to support money laundering reporting officer reporting on they are there to provide additional support as well, so there will likely be people within your office that there to facilitate money reports to support stuff as they're dealing with any money laundering concerns. The money laundering regulations require firms to you have a risk assessment for their individual firm on that risk assessment is to cover things such as the delivery channel. So how you deliver services with clients based on race or the deliver services over the Internet all over the telephone, You're also required to think about the customers that you have in through the door. Do your customers come in from a local radius order? They come in on the national basis? Are your customers more likely to be individuals? Or are they more likely to be businesses because they're a different risk posed by each set of customers, It requires you to think about your products and services. So what kind of services do you provide to provide world writing? Do you provide standard information cards? Would you only provide a bespoke service? Are the different ways in which your services can be accessed? For example, can you access your services through an online portal? Are you providing in half services for anybody? For example, is there are there different ways and what do you provide? Services which might make me different from another solicitor or under the law, all of this could make a difference. Do your risk assessment of the situation asked the country's and the geographic locations in which your cards come from the such a thing as high risk countries on the money laundering regulations requiring to assess the risk of the countries that your clients come from. Talk about in more detail later. All so, all of this needs to be risk assessed you to make a risk assessment as to the likely risk posed by the individual client on the likely displaced by the individual transaction. In addition to that, you're usually probably used to checking identity documents for the client on also understanding where their source of finances coming for their identity document might be their passport. It might be the driving licence, my being a trustee bill, for example. In addition to that, you also have to check where source of finances compote. And so what this means is that the bank or building society on How did the money getting? Is it from somebody's where you just so it from a gift or a loan, and you're supposed to understand exactly where that's come from. That's what evidence of that you might be asking, for example, for evidence for counters. You won't be asking for evidence for dividend payments. You might be asking for bank statements. There's lots of different ways in which client good evidence their source of funds. Onda also their identity documents as well. E. D d stands for enhanced intelligence. So CDD starts declined due diligence, Which is those identities? Documents Enhanced Due diligence is where you ask for extra documents and information because there's an additional concern about transaction. All because you haven't met the client in person. When somebody's further away from you, it's important to take extra steps to satisfy yourself. You might, in addition to asking the passport documentation or driving licence documentation, also that when e search eso where you search with the credit referencing agency or some other, um, organization to try to find out where they're somebody is who they say they are, checking the information that is contained on credit referencing database is back. I'm so all of this information we put together to provide a picture of you somebody says that they this is important from an anti money laundering perspective because it allows everybody to gather information within the phone about person on about the transaction. We can understand that somebody is who they say they are. It's not somebody Impersonating into the person, for example, cause that's how perforce have been perpetrated by Impersonating somebody. But then, in addition to that, that the transaction is being conducted appropriately, That difference are legitimate. As far as you could possibly tell that that's the case on. Does this fit for the oval profile of your? Once you understand the nature of the transaction profile of the kind, you can make a risk assessment as to whether or not this is likely to pose any concerns and then might also be concerned Ways. When you're doing your client, do diligent when you're doing your enhanced E religions or when you're checking source of phones. So all of this can help you win together information about your client capable on whether there's any risk that friends or the client themselves could be involved in criminal activity. It's important, and the money laundering regulations require that due diligence should be conducted at the start of a relationship, so a soon as you possibly can, and this is to help avoid any problems overall with the client transaction on to insure that the client doesn't getting women to stick about. What is possible, always impossible it helps to manage expectations overall is going to be much easier for you and your firm to sort out any problems if the right identity application documents in the right risk assessments are applied. And if the client's expectations are managed as to what they can use the client account for at the who can discuss matters with the firm on what the structure and time taking us to the transaction is likely to be. The money laundering regulations also require firms. Do you consider whether we'll know somebody is a pep? You've got the word pack on the slide there on Pep means politically exposed person on the politic expose Person is somebody who has probably stood for an election or is in public office. There used to be Peps overseas, and now Peps are also domestic as well. And so there was an important link between Peps on bunny bordering on. People are concerned to make sure that corruption doesn't go checked It also, when you're dealing with political exposed person, you're expected to check not only their source of friends, but also their general source of wealth. So if it was me, for example, you might check was paying for a transaction what my wages were, how that was being paid into my bank account. You might also check my genuine source of, well, how much money generally just you have. Is this within the profile of what we would expect on that's to make sure that you came friends. They're not being mixed with difference. Which might this also corruption. If I were, in fact, a peck, Peps will normally come up on your pep search, so it's important to have a look. But all your Elektronik researcher is important to have a look at that search to find out whether somebody is a pep. Sometimes there can be cases where somebody has the same name as a peck on. There can be a lot of false positives there. Your electron, except should also check for something called Treasury sanctions list. And if you get anybody who's on Treasury sanctions that it's important you inform your money laundering reporting officer immediately. In addition to that, you need firm wide authorization for dealing with packs. So again, if you get any peps, do you make sure you're taking those? If you struggle to obtain documentation from kinds because their overseas, you can ask somebody else to undertake the due diligence for you on this is what is known as reliance. There are requirements for reliance on your money. Laundry reporting Officers should be notified if you're in the position of asking somebody else conduct client intelligence for you because there is a liability for the It should be somebody who's appropriately qualified, so qualified to a similar standard as a solicitor on who is also regulated and for the purposes of money laundering as well. So somebody similar might be somebody who's regulated, for example, by the Xia. And then, finally, just to think about awareness and training for all staff should be trained money laundering. And that's a requirement under money laundering regulations. So anybody has any involvement at all with climate needs to be trained in respect of money on a failure to do so and could love money. Your reporting upset part is a burning quite significant trouble if you're concerned, but why you're being trained on money bordering on that something. It is a requirement there because she work in a simple is that there is something that everybody needs to go through and understand in order to protect the firm and to ensure they're complying with the laws. You can be prosecuted for failure to report your suspicions of money laundering to the money laundering reporting officer. So it's important to follow the process on the previous slide. If you're talk concerned about a transaction, if something appears unusual or out of place, report your concerns to the money reporting. So let's move on to thinking about risk assessments on when we're talking about with assessments. What we mean is the risk assessment that the firm has put in place overall, but that also needs to be linked to the risk assessment that the Sisters Regulation Authority has written. If you're regulated by them or by the capital for license provinces, if you're breaking regulated by them by your own individual regulator with in addition to that, the that needs to be thought about in the context of what's happening on National on super national level. So what we're going to do now is pick out on have a look at some of the key risks that have been highlighted a natural, super national level in order to demonstrate to you some of the scams around there. Some of the concerns highlighted on that you might see when dealing with your individual clients on what I encourage you to do, is to go to your money more important, or whoever is in charge of your compliance teams or whatever to find a copy of your individual money laundering risk assessment on. Have a look at that to make sure that you've understood what's there. So the idea is your national risk assessment. And super national risk assessment should feed into the S R. A risk assessment, which should in turn, feed into a firm, wide risk assessment that's applicable to your firm, which then in turn, then feed into the client due diligence that you do for your individual clients that come in through the door. So you need to have that awareness of your conducting a risk assessment as to what it is that those risk assessments at the broadest level say on the and in addition to that, how that information applies to your client transactions in order to think Hang on a second. Does this sound strange? Is this something that I should be aware? Yes, you might not be alone in in looking at that scenario and saying I need some further information or help in dealing with them. So let's think about the UK National Risk Assessment money ordering on what that identified waas high and many wandering as a concern, too. If you're dealing with a client who is who has a particularly its high net worth clients, he makes a number of investments in high end property. And this is the kind of thing where the authorities are saying that there can be sometimes complex business structures involved. Complex truss structures over see structures that can hinder theme appropriate assessment. Concrete assessment of what's actually happening in transaction on can be used to facilitate money laundering. That's not to say that your particular finds doing that just to say that camp examples of that taking place. But I'm in certain circumstances, so that's something that's been highlighted on the UK National Risk assessment. In addition to that, they've looked at complicit legal professionals, people who may be using transactions in order to facilitate money laundering. Legal professionals can be sometimes complicity in doing that, complicity in facilitating some complex boards have money laundering, and they've also added on on their abuse of client account. So where client account, he's being used as a banking vicinity, for example, or people are moving money around inappropriately within current account. I'm not necessarily following the accounting on balls and principles. In addition to that baby toe identified peps. So making sure that people understand what a politically exposed persons on how that applies to their requirements in the money regulations and that those things being checked perfectly I need you wide level has been concerned about the use of email. Me, I'm So, for example, Bitcoin and also I'm crowdfunding as well. So if you get approached by anybody who's particularly interested in using the money to pay for all or part of the transaction, I'm always looking to use crowdfunding for the same purpose. You're going to probably need to take Specialist of Bites to understand the nature of the disassociated with that transaction. In addition to that, trading assets has been highlighted is it has another concern, and if you're again in a position where somebody is looking to make investments or trade in gold diamonds, those kinds of things do be cautious and be aware there have been instances relating to, if you are, I'm forging. So if you are coming across documents, which which could be forgeries, this is something that's been highlighted in the EU wide level as being concerned. You might be seeing photocopies off passport documentation you might be seeing, um, instances where people are sending you scanned copies of information again. Just be aware off. Need to think about whether documents could be forgeries are not on. This is where conducting additional checks, requesting additional documentation. I'm having somebody else can consoling to say that thes things appropriate, Crowned also being aware off the way in which the documents could be transmitted to you and be forgeries of important. This can all be backed up by an Elektronik search as well. So this helps you to come back to make sure you're conducting, said you can say. Actually, I'm confident that that person does not address and it provides and gives you more confidence in dealing with that individual. They're concerned about criminal gangs infiltrating law firms and have been some instances of that. There have been some prosecutions recently on, and then there's also some concerns and honest right there. We've got around information showing people making correct referrals to the regulation. This has been highlighted by the financial actually task fools as being a key concern to make sure the people are in fact, on making the correct referrals to the regulator. And that would be the s away. There's been any concern about misconduct, but it could also be the national crime agency if you're concerned about money laundering, So let's move on to thinking about what he s away. So you remember from the previous line what we're saying Wasat. The risk assessments that are conducted need to fit together. So the international to professional risk assessment with just then informs what happens in the hallways risk assessment. And that, in turn forms what happens in your firm risk assessment. That, in turn, then informs the individual relationships that you have with a crime. But the X ray have done is focus on the risks to them around law firms that moment on what's important from a money laundering perspective. So that's what's on the slide they're going to be at the moment, I'm not. It's a way of high a lot. It is being risks on what's then called down. Reasons they're giving for that there and this can help up. There doesn't really is focus on the kind of scams that around at the moment some of the danger areas where you might notice that points out money laundering. And if you're dating kind and you notice any of these circumstances, this is where you might think about making a report to the National Crime Agency. We'll ask yourself whether this situation is suspicious. You might also think that there's elements of professional conduct need to be considered as well. You need to go to the S away. So that's why the S o. A. A warning about these top two circumstance. So let's have a look at what's on the list, and the first thing is client account. If you're operating a client camp within your new often appreciating at this point in time after beating account and that in itself can protect you from running, However, they can also be on the movement of money between parties away from that. You haven't left 17 on that movement. Money's might very from what you're seeing in the transaction. And so sometimes not operating lines can can in itself cause a problem that this I initially that in terms of setting yourself, you know, it has what I've seen in this contract matched what's actually happened between qualities. So there is and can be an issue there. If you're not using plant, not operating client account. Are you confident in Muneeza or deal being done with the party separately? You're actually seeing what's actually I'm definitely going on between. And how much for if you are putting on your handling money that's can become an issue because you might be handling the proceeds of crime. Or you might be helping facilitated by taking the money that criminal proceeds into the lawful and then potentially transferring on somewhere else. So this is what a parting client can be particularly interest because you're taking that money. I knew you might be the world long doing so as we've said, sisters have good name people trust him, and so is the easy way, potentially for people to launder money to make it clean again. Okay, so when you're operating account, it's important to understand the nature of the transaction and look out for warning signs. When you're dealing with that, things are light on. That might be money coming in from different accounts to what you necessarily expect when you come in from different names. What you necessarily. It's about different amounts. Surviving. You're being asked to you send money back again because it's coming by mistake. You'll be asked to send money. Act in different directions because it's coming bombs they before they might then be trying to use you as a banking facility by using a private account. Teoh Post The deposits were different things. The artist has anything to do with the transaction or may be loosely related to the transaction. Dean. What? You should be 100 in the current account. It's the money that needs to be 100 in order to facilitate that transaction transaction alone on what is usual for business during the course of their business. It shouldn't necessarily be anything beyond that. In addition to that, you should think about, and I've seen some of the terms of a time limit for which they hold money as well, so that they're not being used as vicinity. And not sometimes could be a good only David. Well, so thinking about these things when dealing with the transaction. And if you're asked to do that sometimes it's because people haven't necessarily understood what client guarantees on haven't necessarily interested the board. That's a lister in dealing with the applied to. But sometimes it might be because somebody has a plan. I would like to help facilitate up when you're drinking some way or another, so definitely worth training your carry on stuff. And they should all be trained on the border, dealing with money laundering and having those stringent procedures in place when dealing with concerns. And you should make sure that your account stuff are trained in respect of money laundering and have thought about how transactions being processed when you're also looking at creating trips that can also be an issue. Trust could be set up. Thio added complexity to a situation or facilitate on anonymity in dealing with the situation or to avoid tax in someone. So there are issues there are creating manage interests. Do be cautious if that's what you're dealing with. Um and complexity in structure can be a difficult thing to deal with that if you're holding something while just being created, think about that. Are you acting bank facility? Is that a legitimate part of the transaction? Good. Somebody wait until that trust has been set up before trip starts, Whole money, those contracting. So do you think about how it's being set up? What steps need to be taking on what your role indeed, that as you're doing, think about the size and the value of the transaction. There's lots of different ways in which people control the money on that could be a little go. Yes, I have said is it's very attractive for money, Lord, as much money as they can as possible, more go on that one extremely risky behavior. In doing so, however, you can also see patterns where people have sort to launch a small amounts as well. And so you might see this with smaller deposits of cash going back from different sources, or, you might say, a smaller deposits coming in to your client account over a period of time. This is the issue with crowd funding as well. People can launder small amounts through a crowd funding platform by H politics that small amounts into that friend. You can't necessarily trace the origins of where it's what it's truthful. Be careful. Winding cash raising can trace the source. Back cashes comfort on, so it becomes very difficult. There are limits, and generally speaking, solicitors mostly take a range of between £100.500 pounds cash. Somewhere there, the limits of what is allowed theme amount. There is a limit when you don't have to do due diligence. So there's a Dean min emits limit their underneath. Which point due diligence is the card. And that's what Jews now down to 10,000 years into the new money laundering regulations. So that's not to say that could be processed in cash. But the that's the limit, which you do due diligence. Winter becomes in the hands of cash over to you in a ward one envelope. You shouldn't be taking anything more really good state in your firm's policy. And if you have, you need to report that to the money and have a discussion with them about circumstances really shouldn't be happening in the first place. Account stuff should be trained perception stuff should be drained. Anybody should be trying to say No, don't accept catch. You have to come back if you want to pay a large amount paid in to banking facility, we'll explain to us how how you come across come into this amount of cash because we have to be able to trace the source of funds and dean with a transaction. If you have any transactions that don't fit with cards. Normal pattern in some way, facilitator. Anonymity That could be a concern. That kind of comes to you and says, This is the transaction that I'm going to do. You guys reckon applying and you always do that piece of work and then all of a sudden they want to do something different. Is that keeping with what they do? Have they saw over time to build a relationship with you in order to facilitate something a little bit more strange in the longer so have a think about that also, think about this. This fit with the normal course of work. We do what we always do it this way for this particular climb off notice kind of years and its fine it might be. But also, is there something a little bit odd in a way this time to do things and if so, why if you were reporting on dealing with different types of products, and that would be different types of products that you didn't. But it also could be different types of products that your client delivery mechanisms that you haven't necessarily believe understood. So this might be if you're used to dealing with things that I used to dealing with commercial clients. You, I'm operate certain topped business. Say, for example, shopped, for example normally or if they did damn region, those constantly kind of average high street commercial clients that you and you used to look like their businesses and understanding the way they're set up and how they deal with things. All of a sudden, you come across more digitized businesses, have you necessarily interested, set up in the way they're dating with things. Or perhaps if you get somebody, he's a structure that business in a different way that's more complex on maybe has out outside official investment those kinds of things. Have you understood the way in which that business is set up and its operating when you're taking a client. Similarly, if you get different types of business, some give comes to you, for example, that a great and funding for Have you interested in the way in which that operates and who their clients being here? The council investors might be in relation to that. If you haven't understood the nature of the transaction, you're dating with different types of new types of business digital businesses that you perhaps someone got that experience. Just be careful and cautious about making sure that you understand the nature of that business on help points before you go further transaction. In addition to that, if you're offering new delivery mechanisms and new services, there might be pushed points in the outside organizations with malicious intent. Tal Criminal intent could take advantage of Onda, haven't been fully explored. The organizations and with criminal or malicious intent could take advantage of that haven't been fully explored on not something that people might try to take off. If they become aware that this is a new delivery mechanism, they could be differently. We have a dog, and in digital terms it's referred to it. I miss zero day kind of scenario, something that's completely unexpected hasn't yet happened. Something at a vulnerable to a loophole in digital services that hasn't been seen. But that could be completely expected to cause a problem. So there's always a danger in dealing with new general delivery mechanisms. If you're stuff number in, your phone has taken on a new way of doing things, and then just be careful. Be cautious about that because, you know, you might see different types. Clients result, and that might be different ways of doing things. Problems that come up that haven't been thought up gets it because we can't think of everything and consider everything to new ways of doing things. Be cautious when you're dealing with new clients who are remote on. You haven't met before, so anybody who isn't coming into the office and you don't know very well it's very easy for someone to vote on. Pretend to be somebody you might have known. The voice of a club has been in years. Somebody else foams. He might be a relative of that person or being my how say they've got permission to talk to them. Have they necessarily got commission? Are you confident of that? Are you dealing with somebody who isn't coming into the office and the transaction? That seems a bit strange. It can be a lot easier for somebody. Teoh pretend that something is okay. If they are only conducting themselves by email, you only speaking to the telephone. If somebody comes in and deals with the face to face, you're likely to pick up a much more communication signals. And then you get if you're just speaking to the FEMA or over the telephone. So as a result of that, it's important to think about, you know, making sure that you're having that contact with somebody you understand of the nature of the business that they're doing. It's a lot harder for somebody to lie to me if they're doing it face to face, because in different ways you'll pick up on what's actually going on circumstance. If you feel it all really easy, that's not being internal signal that something isn't quite right about situation. And then the final two things on the list are payments to from the party to avoid you mentioned. If you've got money coming in from outside sources of a transaction just be aware of that can be an indicator old tsunami, and obviously a lot of people they're going house, for example, used to back down and then might be usual places where they might be 1/3 party involved. So, for example, or any form of lender, you might expect to see your type of transaction that you do. And if that's usually not absolutely following its where somebody's funding something from 1/3 party outside schools, you also need to get identification patient documents with them on understand the nature of the money. That's when you know where that's been. A source for that other person who's funding my knee and independent legal guys because there might be a conflict of interest between two people if they're funding a transaction, all investing or something, they might need to seek independent legal, of course. Also be careful if your client coming from a high risk country, so that's country that these listed by the Financial Action Task falls as being one of the high risk countries on There's a link at the end of this weapon are on. I suggest you follow that. Have a look. It's really helpful it lists all of the different drivers countries, no service countries. It changes maybe three times a year, that gets updated. And our friend, when we're talking about high risk countries, we're talking about water on jurisdictions or where this jurisdictions, where there's been recent incidents off terrorism, where there's concern about without high respect, has been enough particular country. So those jurisdictions that tend to be highlighted by the Financial Action Task Force. If you have anybody coming from virus jurisdiction, you need to go talk to money onto reporting officer about the additional steps to put in place to verify where those it's a little efficiently into your firm would risk assessment you might be watching for that weapon are saying, actually that it didn't apply to me or we don't have plants that, well, we don't operate client account or we don't do that particular thing. Maybe there's other respect. It's out there. You think more important of your individual, so we need to produce in. It's an individual from risk assessment, and as a step, my put the firm, you might already have that I'm pretty to go have a look on to see what your firm was producing around the risk assessment for money laundering regulations on You should be thinking about the different departments that are there on how it all fits together. We've what's going on in your firm type of clients to get in for the door to your client will get normally. Andi, give instructions. Do you meet them face to face? Do you meet them by email? Are there different things as to what's happening with your clients and how how you assessing them different types of risk according to the profile of crimes you get. Do you get some very wealthy clients? Do you have every day trying to not just be buying a house? What is the value of the property that you're dealing with the day to day basis and hands stuck for into the national picture? What level of risk in your phrasing, you might face quite a lot of risk if you're dealing with very high value transactions on the day to day basis and think backed up with the national picture. Where does that place you amongst firms nationally, for example, on DSO, do you be aware or variations in house prices throughout the country might be a way to meet a very wealthy, comparatively to the rest of the country. Therefore, Jennings comparatively large sums of minutes. So do be aware of those kinds of positions. Were you thinking about your firm risk assessment as a whole? And you're from what? I've already produced a risk assessment, and it won't give you lots of information about the type of clients that you see on, therefore, where the whiskey's transactions are likely to pay. And that's the intention of the risk assessment. So go away and have a look at what your phone was produced that should then inform the type of risk assessment that you're doing good clients on how that works. So in terms of your risk assessment, that might be a simplistically applying due diligence on looking. It's also funds in a transaction, but if you're doing more business business with that, it makes sense to understand them a little bit more on what that means. From this perspective is used to be some guidance from the law society that people used to use years ago, which was called Know your climbed on cable. I see on that going, so I think it's still great for today and goes along. So what else is already out there? There's no substitute for getting to know your client in detail. We know somebody for years and years news. It does make a difference as to your risk assessment, because you're likely to know the Internet of their business a little bit more of under certain. Ask the questions over a number of years. Now, if you haven't now, time to start doing that on. If you've been doing business with somebody for years and you don't know them that well, then do you think about taking the steps to get to know them a little bit better? Because that's a part of the risk assessment you're dealing with. So it should be informing those individual relationship you have with people and also should be informing that due diligence that you were doing so that's up there thinking about you'll firm or risk assessment on how that works with relationships that you have followed. And if you're not sure what to do about some of the relationships that you've got, where there were no, you know, this kind of becoming a regular fine. We need to get to know them a little bit better. Do we need to understand their business a little bit better? I told your line manager that on about facilitating that a little bit more, because it will help to lower the risk that you have. If you understand your client's business a little bit better. So what? The implications you when you're doing your checks well, cover. Think about that for more risk assessment and then going pass a client for their source of ideas. The client. Their source of funds have I think about what you need any additional information. For example, is the client remote overseas? Do you need to do additional due diligence when dealing with crime? Once you've got my information, have a think about. Do you need to think about anything else on that might be, you know, is this relationship in any way unusual? Everything this before have suffered with the overarching risk assessment on. You should be doing your electric checks as well. So that would be looking at somebody with a peck, whether they're subject to Treasury sanctions that might also come up on your electric search. Whether anybody is closing any other risk tour that might come upon your e search. And then you have to think about whether or not you need to make a report to the money laundering porting officer in respect of that point and if they have to make a report to money, too important Money launderer reporting a possible consider method to make a report to the National Crime Agency all might give you some advice back in return. And as a result of that, there might be further things we need to think about. If you haven't made a report, then well into the relationship as it goes on. Think about all the factors that we talked about today. Hamlets in your risk assessment Has anything changed? And it's not just that the start of the relationship that you do, you risk assessment. It's all the way through. Do you need to think about anything different at all on then? I'm asking progressive the transaction, monitor that relationship I think about Is there anything else that needs to be considered? So that's how it works at the moment. Do you think about that for my risk assessment and think how you need to deal with that particular client? Is that trying to regular client? Are you relying that know your client prevention in order to make decisions? Or are you relying on their client due diligence and what that looks like? So you making sure that you've got the right identification documents and placed the rights. Also, friends Information in place on the right. Information about your client is very key, and you should do not at the outset of the transaction, very playing the money Georgia regulations that needs to be solved at the outset so it doesn't cause problems later transaction. If you haven't got all of the documentation beginning, Andi have to make a report like one because you haven't received it for your concern that it's missing for any particular reason. It can cause a delay in the transaction. Lovely client jumping up and down, phone or even in person, and that could be go stressful for both. People just want to get out of that situation. There's a difficulty. Then there's a difficulty, that kind of situation because you haven't done it in the beginning, so really important thing. Make sure you're doing at the beginning of the transaction, and it also helps monitor clients expectations as well. Yes, we do need this information. Yes, we do have to comply with money laundering regulations. And then we have to ask you for this information in order the weekend complaint on that we can demonstrate this transaction is okay. So I'm thinking too important to maintain at the beginning of the transaction. And then if there's any problems, you can say that this transaction is going to be delayed while we obtain this information. And this is the life time scale, and it does help to manage people's expectations. This slide is just about your options for identification. Documents on just looked there saying, See copies of people's ideas And that means, you know, physical copies. Bringing in the passport, uh, driving lessons, for example. Bill, if you're getting photocopies by E mail off, you're saying people over Skype to make sure that they much their passport identification developments associating with them, make sure you're obtaining e verification report as well. If necessary, people concurrency another Celestri area and sometimes as a fee for doing on having the information signed off. If you've got a relationship or a partnership with somebody else who is qualified and regulated to a similar standard. So, for example, somebody you might be regulated by the FDA, for example, he's referring clients anti. You might be able to accept copies of their documentation into the Reliance provision on That's where you rely on somebody else to that. Do you speak to your money, Lord important officer, if you're going down that road because there are liability implications as well. And if you are dealing with somebody in a care home, for example, could get a copy of a letter from the manager. But you tend to also from the people in care. Homes have additional documentation, such as pension books, for example, that can be provided on supplied. So detain creatively about kinds of documentation you might piece together in order to present a tight. You know, something passing that due diligence, but also that Elektronik surge is going to help you as well. When Dean, if you're dealing with clients overseas to be aware that there are Elektronik searches that mark go above and beyond what your firm is offering, they received electronic searches that can double check passport numbers visa because those kinds of things. So do be aware of those that can help facilitate putting into place that correct idea for you. When you're looking at source of phones, it's important to be aware of what constitutes also friends. And so what constitutes the source of funds is not just the plain that the funds have come from. So somebody's buying house, they say Thesis savings. When it's coming from HSBC Bank, well, we should be up to demonstrate savings have been in the account processing time. Some firms that back foot some six months, some 12 months to demonstrate that that money has been there. Is it within the profile of the climb? So let's say somebody who is a paralegal in a firm on their buying house that he's in High Street Firm somewhere in the north of England. That bond has is a multi £1,000,000 hands. You would say, Well, hang on a second that doesn't necessarily fit with the salary that you, but they might say to our activities. You know, I've inherited this money. They don't have to demonstrate that that's the case or a husband and a lot of money. They might be able to demonstrate that that's the case. So there are different ways and means being able to demonstrate how somebody has come across this money that they're using to purchase this property. But that might not necessarily be in keeping with the usual self. So ask yourself, what does? This should be able to see those making the salary payments going to the bank they used in a current account. If they using savings, how they come about savings, and if they made regular deposits, you should be able to see that so something is a doctor, for example. A private consultant might be only a significant amount of money, and you should be able to see those payments going on. That kind of person might be buying more expensive property than somebody who runs, so all of that should work together. You should have a picture overall, how that's come about where this funding is confirmed for whatever that is that there have been taking. And if it's come from 1/3 party who also need to see that I can't details their identification details and as we said before, they made independently Venables. If this can take quite comfortable with people not wanting supply that information, financial information Teoh to the other people in the family in order to pass on. And it can be something where you can see them directly, as long as you know, creating a retainer by implication. So they may need to be a bus to seek independent in case there's a conflict of interest. If you're acting on both sides in a transaction course, um, additional complexities Well, so you think about dealing with that, whether there's any conflict there. And, of course, if that is a conveyancing transaction, then the lender would need to be notified as if there was any third party funding. Indeed, that what that looks like. So all of that goes into play when dealing with dealing with additional sources of funds. It isn't simply enough to understand the name of the bank where the funds come from. You need to understand more than that. See those bank statements? Do you be aware that, generally speaking, there is something of an urban legend out there that the bank will pull deposits in cash of £10,000? Sometimes it seems to be correct. Sometimes it seems to be an urban legend. People sometimes to get around this deposit in cash in smaller so you might see a deposit in cash in when £3000 a deposit in caption where £5000 depositing cash somewhere else £3000 over a period of time will not close together. Their approach. Different banks to do so. Different locations of the same banking that in order to put into the camp. Come on. If that's the case, you might ask yourself why they have a particular way. I would person your everyday person buying on average in the UK look, any deposits in cash boiling deposits it all around came up three to mark and above. Just to make sure you know, to ask the question, where does this money come from? On the higher the amount. More evidence to support. To demonstrate, to say, this is where this money is controlled. And some of those evidential documents might be, for example, letter from an accountant. Evidence of dividend statements, copies of previous accounts, companies that might have been financing any investments that are being made. Any documentation told that support where this money is conforming, how it's been raised is useful to supporting what the client is standing. Okay, so the next Lloyd is about company with Indication on Over the last couple of years, we've seen companies having to register. Now they're significant control officers to company sounds. And so what that means is anybody you has significant control over company has to be registered at companies House on That allows you to see both the beneficial owners, but also anybody you can record the activities of the company should be registered their companies house on. The idea is to provide more transparency about who was involved in a company. And it can also apply to interest as well. And so I'm what we recommend is to have a look at companies have split your data with companies on to see you, too. Interested as the beneficial owners on, he was a person of significant control. You're likely to need Teoh, identify those persons and make sure that they are have the authority when dealing with the company. As a result of that, do you make sure you're being aware of who's conducting the activities of the company? I'm thinking about whether friends are coming for your relation to that company, whether they're coming from outside the company. Is it from somebody who's got significant control wide funding personally? So have a think about that. When you're dealing with your companies, make control, you looking companies house. In addition, Teoh comparably, before you start to obtain identification documents, are you making sure you're getting from the people? And if you've got a spokesperson there, who is one of the beneficial over all isn't doesn't have a significant control. Are you confident that they've got the authority to be dealing with you on behalf of the company? And so I'm looking at that in terms of the next side. What that means is, it's important, Teoh, do due diligence. Do your companies have such and then think about my control will do your due diligence. I'm dealing with your source of funds after that because you company house really should be that starting point into some structure of the complex and who goes beneficial over. And sometimes those beneficial is gonna be further. Companies on the complexity of the structure might become complicated on this is baby market. Additional support for me or those other people in your organization, you might have the expertise to advise you this. Next. Lloyd. It's about the definition it for political exposed person, and it gives us there about you might be politically exposed persons for the purposes of the money laundering regulations. So have a look at that, and you can also use the side. If you want to say to your client, do you fall into any of these categories? I don't expect you to go to the degree when defining whether somebody is politically exposed persons. Not, however, it is important to think about it. So making sure that you're saying to people, do you fall into one of these categories if you're concerned if something is public knowledge, if you give your heart, for example, it's come up that they were known close associate, politically exposed persons. Or you know that then politically person. But it hasn't identified them on the Elektronik search. This is where you should have a look. So actually do fall into one of these categories. Can you explain a little bit? So ask the questions if it's something in your mind, but you don't have to go to the degree. Teoh, find out whether somebody years is no politic eight exposed person. If some of the years of politically it's both person, you need to be further. There's also friends checks when you need to establish that James source of wealth on this is about saying, How much money do you have in the bank? I need to understand your gym source. 12. Because you were politically exposed persons, you should be up to explain that to, um and say to them, Is this something you before? And this is why we think you're politically exposed. Persons asking those questions and looking at that doesn't necessarily mean that somebody has done anything wrong, and they shouldn't be treated anything differently. It's just birth information needs to be so more information about their general source of wealth, of making sure that fits with the profile of all. I'm not be more bank statements that could be further information from the blind and say to them, Does this fit a so, For example, what is somebody sandwiches that David, if it can you find out somebody's, For example, working for the European Union were working for Parliament. How much? Just an MP get paid or How much does you in Peking, Paige? What does that look like? Doesn't fit with what you have been told here. When you're dealing with that particular client, does that fit with the bank statements? You've got company. See, overall, that person has more money. If so, where does that come from? It might have come from family support. Want been inherited down through generations on. So that might be evidence that you might have to be supplied with decided to give This house has been passed down through generations, or this income that we obtained from this source is impossible. For generations, a not documentation might be available via by the client. So it is important to note that staff members can be prosecuted if they fail to report suspicions to the money laundering reporting officer. I'm no suspicion should be reported as soon as is practicable buying that person so accordingly. If something doesn't feel right, it doesn't seem like doesn't look like you should be reporting that your money laundering reporting on this is the advice. Generally speaking, that we give money to importing offices to safeguard stuff members on anything at all that you're concerned reported to that money laundering. And if they're not available, for example, the holiday report it to the next best person. So, for example, the finance director all senior partner, whoever it is that might be available, cold deck critical. Somebody got that going to them and say This might be a money laundering concern because of this. And then you have dealt with that concern. You know, as soon as you make the report, that's your defense. Basically, any prosecution so should provide you with that level of protection. If you make a report the next still like it's about saying, Support your money laundering reporting, don't be concerned. The money World War Two, the National Crime Agency make sure that you're dealing with that situation. Proof. Okay, on. Make sure that stuff around you in this time that the military durable works to safeguard. The organization wants to say God stuff on that that goes wider as well. We're making a report. You might be saving people's lowing. You might be disrupting criminal activity, so it's very, very important. Sometimes it could be an unpopular decision to make a report to the National Crime Agency because you can delay the transaction while you wait for consent alive from the National Crime Agency. I don't be alarmed by Don't get tighter Pantic, but it can, you know you should be given the additional support. You, in that situation in the village should be working with the staff members to do so. Support your little to be aware that they have to make some extremely difficult decisions. I went dating with thes type of Sinama views about how best to protect firm best protected, how best to protect staff. And then finally I promised, and it has lied earlier about high risk jurisdictions. There's a list there, so have a look at that list, and I'm that list is correct. As at Sept 2019 this is being filmed. However, they do change approximately three times you, although sometimes those changes camera caught slow. If you do it over a period of time, you do notice that the country's do change over the years, So those are the current list of high risk jurisdictions. We've got any clients coming from those jurisdictions that needs to be reported into the money larger reporting opposite considerable additional documentation you need on door so there won't be a policy decision taking within if I have to deal with plant people might potentially coming from those jurisdictions orphans that coming from those jurisdictions. So that's the end of this weapon. All. Now what I want you to do is to answer some questions about what we covered today and have a think about some of the points with currents. And those questions are there to facilitate demonstrate. They learn about the points we've covered in today's weapon. Okay, thank you very much for watching.