Category Archives: Money Laundering News

Bell Pottinger – can reputational risk destroy your business?

Reputation in mud

The Bell Pottinger story must be a warning sign to risk managers

The answer, Bell Pottinger has taught us, is yes. Mrs Thatcher’s favourite PR firm entered administration this week on the back of a disastrous, well, PR campaign. The swirling scandal that brought down an industry giant started with a £100,000 per month contract to run a campaign in South Africa on behalf of the Guptas, a family-run business empire ensnared in the largest web of corruption and political intrigue since the end of apartheid.

Bell Pottinger began its campaign with fomenting discontent of “economic apartheid,” the idea that racial injustice in South Africa has simply been replaced with economic injustice. However this campaign increasingly became about deflecting attention away from the actions of the Gupta brothers.
Continue reading

Money Laundering Regulations – how do criminals and terrorists abuse law firms?

Grenade and money

At least £57 billion is laundered through the UK each and every year. It’s not just criminals turning their illicit money from crime clean. Terrorist financing is often overlooked when it comes to anti-money laundering efforts, but acts of terror in the UK and around the world are being bankrolled in the same way as money is laundered.

Law firms, as well as other professional services such as accountants, estate agents and financial services, are at high risk of being patsies for criminals and terrorists. Because their accounts are seen as “clean,” sending dirty money into a law firm’s client account and having it sent back out again is a sure fire way to launder dirty cash.
Continue reading

Money Laundering Regulations – individuals and organisations receive large fines

The Fourth Anti-Money Laundering Directive, which came into force on 26th June 2017, brings some key changes to the anti-money laundering policies in law firms and organisations. Recent high profile money laundering scandals demonstrate the importance of having the right procedures in place to prevent money laundering. This blog gives some examples of the money laundering convictions that have damaged the reputations of firms and organisations.

Deutsche Bank learns anti-money laundering lessons the hard way

Deutsche Bank

In January, Deutsche Bank, Europe’s largest investment bank, was hit with an incredible £500 million from multiple regulators. The bank ran a $10bn money laundering scheme involving the Moscow, New York and London branches shifting roubles between Cyprus, Estonia and Latvia in a manner that was “highly suggestive of financial crime.” The regulators said “the bank missed numerous opportunities to detect, investigate and stop the [money laundering] scheme due to extensive compliance failures, allowing the scheme to continue for years.”
Continue reading

On-demand Fourth Directive webinar – your questions answered

On 26th June 2017, the UK met the EU’s deadline and transposed the Fourth Money Laundering Directive into national legislation.

On Monday 2rd July over 200 law firms and organisations joined Director of Best Practice Gary Yantin and anti-money laundering expert Gary to discuss the implementation of The Fourth Directive and the new Anti-Money Laundering Regulations 2017.

The webinar covered some key questions surrounding the new regulations such as:

  • What must firms do to comply with the Fourth Directive?
  • How do the changes to pooled client accounts affect me and how likely are the changes to come into force?
  • How do you carry out a risk assessment?
  • Is there Law Society guidance on how to approach risk-based CDD?
  • How will new legislation such as the Criminal Finances Act affect you?

Watch now

Continue reading

Summary of Fourth Directive Changes in the Crown Dependencies

Jersey, Guernsey and the Isle of Man are not members of the European Union and are not obligated to adopt the EU’s Fourth Anti-Money Laundering Directive as the UK has done with the Money Laundering Regulations 2017.

However, with close to 100 licensed banks, tens of thousands of regulated professionals and hundreds of billions of pounds in deposits and funds across the Crown Dependencies, complying with Financial Action Task Force (FATF) guidelines and implementing a international AML/CFT standards is a priority for the Bailiwick’s of Jersey, Guernsey, and the Isle of Man.

Jersey and Guernsey, in their 2017 answers to the European Parliament committee investigating the Panama Papers, have committed to reviewing the Fourth EU Money Laundering Directive “after it has been approved at all EU levels”. The Crown Dependencies are likely to implement such measures as other third countries.

Current AML legislation in each Crown Dependency

Isle of Man

  • Isle of Man Proceeds of Crime Act 2008
  • Anti-Money Laundering and Countering The Financing of Terrorism Code 2015
  • Beneficial Ownership Act 2017

Continue reading

Changes between the draft and final Money Laundering Regulations 2017

Approval stamp

The government released a draft of the Money Laundering Regulations back in March 2017 outlining the proposed approach to transposing the Fourth Money Laundering Directive into UK law. On 26th June, those Regulations became law, having been rushed through Parliament.

Most of the content of the final law is the same as in the draft; the key changes we have outlined previously. However, there are a few important additions included in the final version of the Regulations that were not in the draft.
Continue reading

Government rushes through new Money Laundering Regulations 2017

Big Ben and Houses of Parliament

Parliamentary procedure broken in order to meet today’s EU deadline

The government confirmed at the last minute the new EU Fourth Anti-Money Laundering Directive (4MLD) will come into force today (Monday) in order to meet the European deadline of transposing the 4th Directive into national legislation by 26 June 2017.

Due to the general election, the government has been forced to rush through the new rules, and will break parliamentary convention in order to do so.

The Money Laundering Regulations 2017 is a negative statutory instrument. These automatically become law without debate unless there is an objection from either House of Parliament. By convention negative statutory instruments should not come into effect until a minimum of 21 days after they are laid out. However, on Friday the government confirmed they would be breaking these rules in order to ensure that the EU deadline for transposing the Fourth Directive into national law is met.
Continue reading

What’s the latest on the Fourth Money Laundering Directive?

The Fourth Money Laundering Directive updates and expands anti-money laundering laws across the European Union. Unlike GDPR, which will automatically come into force, updating the AML regime requires each national parliament to transpose the regulations into local law.

In the UK, this means updating the Money Laundering Regulations 2007. The government completed their consultation in April and published a draft of the Money Laundering Regulations 2017 to be laid before parliament. The EU stated that the Fourth Directive must be in force in every country by 26 June 2017.

However, the general election called by Theresa May has thrown that timetable into disarray. The new parliament won’t meet until sometime between 14 to 21 June, leaving barely days before the deadline.

Will the UK miss the deadline?

Most likely, although perhaps not by much. The draft statutory instrument has been published and is ready to be considered by parliament. Given the long lead-in time of the Fourth Directive, the consultations and lack of particularly controversial measures, even a change of government is not likely to disrupt the process too much.

Broadly, we know what the new requirements of the Fourth Directive are, and how the UK plans to implement them. While the official change won’t take place until the 2017 Regulations is law, there is every reason to think this will happen sooner rather than later.
Continue reading

The Fourth AML Directive: What do accountants need to know?

Money Laundering

One of the first orders of business for the new government, whatever its colour, is to pass the Money Laundering Regulations 2017. According to EU rules, the Fourth Money Laundering Directive must be transposed into UK law by 26 June. While the consultation phase has been completed, there is still room for a new government to make some movement on the new regulations if it wishes. The Directive still leaves some rules open to national interpretation, so while the core of the changes are set, a new government will have just weeks following the election to decide what to do.

However, for the main themes of the legislation we do know what will be changing. Accountants need to be aware of some of the key changes coming in the Fourth Directive.

UBO is changing

The ultimate beneficial owner of a corporate client will need to be determined and due diligence checks performed. A UBO is anyone who owns or controls 25% or greater percentage in a corporation. If you don’t know who the UBO of a client is, you must take “all reasonable steps” to determine this. If no beneficial owners can be identified, then the details of senior managers must be recorded.
Continue reading