Lecture 7 – Anti Money Laundering Regulation
Podcast 1
Notice
Please note that there may be reference to the term “Terrorist Finance” in these slides.
This is a term in Regulation and in the literature to illustrate significance of risk of Money Laundering
activities.
Suggested reading/resources
Useful Links
▪ Money Laundering Regulations | FCA
▪ Anti-money Laundering Compliance | FCA
▪ Particular topics under FCA Guidance on Anti Money Laundering and Terrorist Finance:
▪ De-risking: managing money-laundering risk | FCA
▪ Notification requirements in the Money Laundering Regulations for FSMA authorised
firms | FCA
▪ Enhanced Due Diligence for High-risk Customers | FCA
▪ Money laundering registration | FCA
▪ Safe custody services and money laundering | FCA
Texts
▪ Stair Memorial Encyclopedia, Criminal procedure (3rd reissue) 5. Specialties of procedure(3)
proceeds of crime (c) Money Laundering/ paragraph 380, available on Lexis and copy on
Moodle for reference purposes only. Not for reproduction. Thank you.
Recent Key Policy Developments
▪ There is a new UK Regulator for Professional Anti-Money Laundering Supervision:
▪ Office for Professional Body Anti-Money Laundering Supervision (OPBAS) | FCA
▪ Very recent Blog (10/02/21) on Law Society of Scotland website on New Anti-Money
Laundering Guidance and benefits for solicitors
Focus of this Lecture Topic (1)
▪ Money Laundering is the practice of concealing assets which were illegally obtained.
▪ “Money Launder” stages: placement – layering – integration. “Money dirtying” stages:
placement – layering – illegal support.
, ▪ Reasons for fighting Money Launder and Terrorist Finance: (i) to undermine criminal and
terrorist organizations and crime in general, (ii) to protect socio-economic regime, (iii) Moral
reasons, (iv) to protect correct administration of justice.
Focus of this Lecture Topic (2)
▪ Compliance with the Anti Money Laundering regime is mandatory to effectively combat
Money Laundering.
▪ In general, for businesses to combat money laundering:
▪ Know your client, know his business;
▪ Be wary of secretive clients;
▪ Be cautious of sudden change in instructions;
▪ Be cautious of clients with connections to countries where concerns exist in relation
to drug trafficking, terrorism, corruption etc.
Money Laundering
▪ What is it?
▪ UN Convention against Transnational Organised Crime 2000 (Palermo Convention)
“The conversion or transfer of property, knowing it is derived from a criminal offence, for the
purpose of concealing or disguising its illicit origin or of assisting any person who is involved
in the commission of the crime to evade the legal consequences of his actions.”
▪ Financial Action Task Force
▪ “Process whereby criminals attempt to disguise and then legitimate their ill-gotten
gains of crime”.
▪ In simple terms: making money coming from a criminal source A, look like it comes
from a legitimate source B.
Why does it occur?
▪ Commission of “predicate offence” (i.e is dependent on an earlier crime);
▪ Accumulation of significant amount of “dirty” money;
▪ Separate and disguised criminal origin of assets by giving them an apparently legitimate
source;
▪ Enjoy ill-gotten assets by purchasing luxury assets in legal economy.
Podcast 1
Notice
Please note that there may be reference to the term “Terrorist Finance” in these slides.
This is a term in Regulation and in the literature to illustrate significance of risk of Money Laundering
activities.
Suggested reading/resources
Useful Links
▪ Money Laundering Regulations | FCA
▪ Anti-money Laundering Compliance | FCA
▪ Particular topics under FCA Guidance on Anti Money Laundering and Terrorist Finance:
▪ De-risking: managing money-laundering risk | FCA
▪ Notification requirements in the Money Laundering Regulations for FSMA authorised
firms | FCA
▪ Enhanced Due Diligence for High-risk Customers | FCA
▪ Money laundering registration | FCA
▪ Safe custody services and money laundering | FCA
Texts
▪ Stair Memorial Encyclopedia, Criminal procedure (3rd reissue) 5. Specialties of procedure(3)
proceeds of crime (c) Money Laundering/ paragraph 380, available on Lexis and copy on
Moodle for reference purposes only. Not for reproduction. Thank you.
Recent Key Policy Developments
▪ There is a new UK Regulator for Professional Anti-Money Laundering Supervision:
▪ Office for Professional Body Anti-Money Laundering Supervision (OPBAS) | FCA
▪ Very recent Blog (10/02/21) on Law Society of Scotland website on New Anti-Money
Laundering Guidance and benefits for solicitors
Focus of this Lecture Topic (1)
▪ Money Laundering is the practice of concealing assets which were illegally obtained.
▪ “Money Launder” stages: placement – layering – integration. “Money dirtying” stages:
placement – layering – illegal support.
, ▪ Reasons for fighting Money Launder and Terrorist Finance: (i) to undermine criminal and
terrorist organizations and crime in general, (ii) to protect socio-economic regime, (iii) Moral
reasons, (iv) to protect correct administration of justice.
Focus of this Lecture Topic (2)
▪ Compliance with the Anti Money Laundering regime is mandatory to effectively combat
Money Laundering.
▪ In general, for businesses to combat money laundering:
▪ Know your client, know his business;
▪ Be wary of secretive clients;
▪ Be cautious of sudden change in instructions;
▪ Be cautious of clients with connections to countries where concerns exist in relation
to drug trafficking, terrorism, corruption etc.
Money Laundering
▪ What is it?
▪ UN Convention against Transnational Organised Crime 2000 (Palermo Convention)
“The conversion or transfer of property, knowing it is derived from a criminal offence, for the
purpose of concealing or disguising its illicit origin or of assisting any person who is involved
in the commission of the crime to evade the legal consequences of his actions.”
▪ Financial Action Task Force
▪ “Process whereby criminals attempt to disguise and then legitimate their ill-gotten
gains of crime”.
▪ In simple terms: making money coming from a criminal source A, look like it comes
from a legitimate source B.
Why does it occur?
▪ Commission of “predicate offence” (i.e is dependent on an earlier crime);
▪ Accumulation of significant amount of “dirty” money;
▪ Separate and disguised criminal origin of assets by giving them an apparently legitimate
source;
▪ Enjoy ill-gotten assets by purchasing luxury assets in legal economy.
