Money laundering
Placement- dirty money introduced into the banking system.
Layering- source of the money is disguised through a series of transactions.
Integration- disguised funds used to acquire legitimate assets and investments.
5th money laundering directive came into force 10 january 2020.
Failure to comply with the regulations is a criminal offence
Reg 8(2)(d) applies to independent legal professionals
Regulation 18- a firm is required to undertake a risk assessment in relation to clients;
Regulation 21-a firm is required to have written policies, controls and procedures to mitigate
and manage money laundering risks identified in the risk assessment. Firm must have a
nominated money laundering reporting officer (MLRO) who will receive reports from others in
the firm and determine whether a disclosure to the NCA (national crime agency) should be
made.
Employees must be screened prior to and during employment & procedures must be
continually screened.
Regulation 27 and 28- verification of client ID.
Regulation 30- verification must take place before any work is carried out for the client.
s.328(1) proceeds of crime act 2002- arranging- enters into or becomes concerned in an
arrangement which he knows or suspects facilitates (by whatever means) the acquisition,
retention, use or control of criminal property by or on behalf of another person.
Penalty is up to 14 years in prison.
bowman v fels [2005] taking steps in litigation (including pre-action steps) and the resolution
of issues in a litigious context were excluded from the scope of s.328 and as such a solicitor
would not be obliged to make an authorised disclosure.
s.329(1) acquisition, use or possession- a person commits an offence if he acquires or uses or
has possession of criminal property.
This usually relates to money which may be paid to a solicitor on account of costs and
disbursements and in payment of a bill of costs.
Placement- dirty money introduced into the banking system.
Layering- source of the money is disguised through a series of transactions.
Integration- disguised funds used to acquire legitimate assets and investments.
5th money laundering directive came into force 10 january 2020.
Failure to comply with the regulations is a criminal offence
Reg 8(2)(d) applies to independent legal professionals
Regulation 18- a firm is required to undertake a risk assessment in relation to clients;
Regulation 21-a firm is required to have written policies, controls and procedures to mitigate
and manage money laundering risks identified in the risk assessment. Firm must have a
nominated money laundering reporting officer (MLRO) who will receive reports from others in
the firm and determine whether a disclosure to the NCA (national crime agency) should be
made.
Employees must be screened prior to and during employment & procedures must be
continually screened.
Regulation 27 and 28- verification of client ID.
Regulation 30- verification must take place before any work is carried out for the client.
s.328(1) proceeds of crime act 2002- arranging- enters into or becomes concerned in an
arrangement which he knows or suspects facilitates (by whatever means) the acquisition,
retention, use or control of criminal property by or on behalf of another person.
Penalty is up to 14 years in prison.
bowman v fels [2005] taking steps in litigation (including pre-action steps) and the resolution
of issues in a litigious context were excluded from the scope of s.328 and as such a solicitor
would not be obliged to make an authorised disclosure.
s.329(1) acquisition, use or possession- a person commits an offence if he acquires or uses or
has possession of criminal property.
This usually relates to money which may be paid to a solicitor on account of costs and
disbursements and in payment of a bill of costs.
