ACCA LW Eng Syllabus H. Corporate Fraudulent and Criminal Behaviour - Money Laundering Regulations - Notes 4 / 8
Money Laundering Regulations
These should deter and detect Money Laundering and funding of Terrorism
These regulations apply to all 'relevant persons' (banking and investment businesses, accountants and auditors, tax advisers, lawyers, estate agents and casinos)
They include:
Risk management practices
The business should take a 'whole firm' approach to assessing the money laundering risks, including the risk of clients being involved in money laundering or terrorist financing.
The bigger and more complex the business the more risk management is needed
Internal controls
These should include:
Appointing a Money Laundering Compliance Principal (MLCP) on the board
Appointing a nominated officer to receive internal reports of suspected money laundering and, where appropriate, to report them to the NCA.
Assessing the skills, knowledge, conduct and integrity of employees
Establishing an independent audit function of anti-money laundering policies, controls and procedures.Customer due diligence
This work includes, for example, identifying and independently verifying customers and their agents and monitoring the business relationship or transaction according to the level of risk of money laundering. (Simplified and enhanced)Simplified due diligence is permitted where there's a low risk of money laundering or terrorist financing. Due diligence work ghouls reflect the low risk level
Enhanced due diligence measures are required when:
A transaction or business relationship involves a person established in a ’high risk third country', or if they are, or if they are a 'politically exposed person'Examples of enhanced due diligence measures include:
Understanding the purpose of transactions.
Increased monitoring
Obtaining additional independent, reliable verification of information provided by the customer.
Ensure customer transactions are consistent with the nature of their businessReliance and record-keeping procedures
Businesses should have written policies, aimed at preventing Money Laundering activities
Employee training on them must be maintained.
Monitoring and management of compliance
Businesses should continuously monitor their policies, controls and procedures and keep up to date