Anti-money laundering (AML) is the process of identifying and preventing criminals from concealing proceeds of crime and profiting from them. Money laundering is a criminal activity that both damages the economy and facilitates and funds criminal acts. There are a number of regulations and laws surrounding anti-money laundering efforts, including the Proceeds of Crime Act (2002), the Terrorism Act (2000), and the Anti-Money Laundering Act (2018).

The impact and authority of anti-money laundering laws and regulations are far reaching and call for organisations in the regulated sector to perform due diligence checks, abide by their reporting obligations, and cooperate with officers of the law when requested by the court.

The UK’s AML regime has stepped up recently; 2018 saw the launch of a new watchdog to strengthen defences against money laundering and terrorist financing. The Office for Professional Body Anti-Money Laundering Supervision (OPBAS) is a group that works with AML supervisors and law enforcements to improve cooperation and improve general standards for AML efforts.

Proceeds of Crime Act 2002 (POCA)

This Act deals with the process of recovering assets that have been gained through crime. Prior to the Act, confiscation and recovery couldn’t occur until after a conviction had taken place, but in 2002 this changed, meaning that assets could be recovered upon suspicion of crime and held until conviction (or release).

Put simply, the primary aim of POCA is to reduce the number of loop-holes in the financial system and to reduce the number of cases where criminals can profit from crime. The aim is to cut the criminals off from their motivations – money and assets, and prevent them from hiding any ill-gotten gains prior to conviction.

The Act was introduced to improve the legislation around money laundering, and the treatment of proceeds of crime, laying out much more concrete and transparent rules for authorities.

The changes that the POCA brought about highlight how effective it has been too. Between 2010 and 2014 more than £746 million of criminal assets were seized, as well as assets worth more than £2.5 billion being frozen.

Terrorism Act 2000

The Terrorism Act (2000) is a piece of permanent anti-terrorism legislation in the UK. It aims to combat the global problems of terrorism, along with its financing – something that is often facilitated through reverse money laundering.

In many cases, terrorist operations are fuelled from legitimate sources of money. By using this once ‘clean’ money for deadly causes, they are tainting it, which is why it’s called reverse money laundering.

Despite its name The Terrorism Act works heavily to prevent the financing of terrorism and, as such, is an important piece of legislation in the anti-money laundering fight. It aims to leave people more vigilant about where money goes to once it is transferred, increasing vigilance and awareness in the regulated sector and empowering staff to raise suspicion if they see cause.

Criminal Finance Act 2017

The Criminal Finance Act (2017) gives law enforcement agencies more powers so that they can recover the proceeds of crime, as well as tackle money laundering, tax evasion, corruption, and the financing of terrorism.

The Act makes companies and partnerships criminally liable if they fail to report suspicion of crime (whether this is due to a member of staff or an external agent). The Act is far reaching and can be upheld even where the business was not involved in the Act or aware of it at all. A prosecution could lead to both a conviction and hard-hitting penalties for any organisation that fails to report suspicion.

Anti-Money Laundering Act 2018

Before this Act was passed, the UK’s domestic sanction regimes were confined to terrorism. The introduction of the Anti-Money Laundering Act in 2018 meant that England and Wales would have the power to impose sanctions independently if necessary, i.e. post-Brexit.

The Anti-Money Laundering Act (2018) complies with the UK’s obligation to conform to standards set by the United Nations regarding anti-money laundering. It pushes towards the investigation and prevention of money laundering and terrorist financing and works to reduce and overcome threats to the integrity of the international financial system.

Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017

This Act introduces the provisions of the European Union’s Fourth Anti-Money Laundering Directive (4 MLD) into national law. These regulations override the Money Laundering Regulations (2007) and the Transfer of Funds (Information on the Payer) Regulations (2007).

These developments increase the emphasis on a risk-based approach to money laundering. A whole series of internal controls and procedures were brought in with the Act, including customer due diligence, record keeping, and imposing a number of obligations on senior management and employers. Organisations must keep up with the changes, ensuring that policies and procedures are in place to deal with the potential risks they could face.

Financial sanctions prevent a firm from carrying out transactions and/or financial services with a person or organisation (known as ‘the target’). They exist for a variety of political, military, social, and economic reasons and work by preventing, pressuring, or restricting targets in an effort to curtail their activities (for example, terrorist financing or the purchasing of WMDs).

Financial sanctions vary depending on the severity of the situation in question. This means they can stop the movement of funds to a certain country and even freeze the assets of individuals. If you or your organisation choose to ignore the sanctions put in place, you are committing a criminal offence unless you have an appropriate licence or authorisation from the Office of Financial Sanctions Implementation (OFSI). Complying with financial sanctions means that organisations need to consider who they enter into business with, and whether any funds received are from a legitimate source. This is known as due diligence.

Sanctions can strengthen national security, as well as create a robust foreign policy. However, they only have this result if they are properly executed. OFSI works by detecting and addressing financial sanction breaches, essentially finding people that are trying to avoid the rules. This role can be improved by individuals getting involved and reporting incidents immediately for the best results.

UK financial sanction legislation enforces the EU regulations, and they set out a specific criteria that needs to be met if you’re going to report to the OFSI. These are as follows:

• If you know or suspect that a person or entity is a target, freeze the asset
• If you know or suspect that someone has committed a breach of financial sanctions offence
• If you have frozen the assets of a designated person or entity

For all of firms within the regulated sector, there are legal requirements to report to the OFSI, with penalties if they fail to do so.

The Office of Financial Sanctions Implementation (OFSI)

The OFSI makes sure that sanctions are understood by all parties involved. By doing this, the whole process is much easier as there is a clarity with all individuals about what is going on and why. Additionally, they make sure that the sanctions are carried out and enforced. Again, this is to create a process that runs smoothly from start to finish. Their actions mean that a professional service is created for the public.

Their work means that the sanctions make the fullest contribution towards the UK’s foreign policy and national security. As well as this, it tries to fill people with confidence regarding the UK’s Regulated Sector, creating more trust between customers and the firms. The Regulated Sector refers to the firms that are part of the financial services community and that are regulated by the Financial Services Authority (FSA). Examples of organisations in this sector includes banks, insurance companies, lawyers, and accountants.

What each financial sanction entails depends upon the regulator. These can include:

• United Nation’s Security Council – Since the UK is a member of the UN, we automatically impose all sanctions that the UN creates at a national level through domestic legislation.
• European Union – Our forthcoming departure will create uncertainty with respect to the sanctions we implement from the EU. After Brexit, we will no longer be required to automatically implement EU sanctions and our departure will also cause possible changes in EU sanction regimes. What is clear is that the UK will have gained the legal ability to impose new sanctions for themselves.
• UK Government – We can also develop our own sanction programmes, but they can be limited in regard to international affairs.

Things to Remember:

Some firms may be unsure about their responsibilities when it comes to financial sanctions. It’s useful to bear in mind the following facts:

• Regular anti-money laundering checks do not screen clients against the HM Treasury list that regulates the UK financial sanction regime. Firms should not confuse the sanctions regime with anti-money laundering procedures.
• Financial sanctions apply to all transactions, there is no financial minimum.
• Politically Exposed Persons (PEPs) are not always financial sanction targets.
• Most of the individuals and entities know when they’re on the sanction list issued by the HM Treasury, so the issue of ‘tipping someone off’ shouldn’t really occur.

It is good practice to check:

• The HM Treasury’s list against your client list
• All new customers you deal with (before you provide them with any services or transactions)
• Any updates to the HMT list
• Any changes to your client’s details

Whatever the business, if you are covered by the money laundering regulations (by being part of a firm within the regulated sector), then you need to meet certain requirements to help prevent money laundering activities.

It is the responsibility of organisations within the regulated sector to comply with the regulations; and with penalties that consist of fines and reputational damage, it is in their best interest to follow the rules. A top-down method should be put in place to implement a clear attitude around the problems in money laundering, and by the push starting with the managers and executives, the employees will then follow suit to produce a complaint workforce.

The Importance of Anti-Money Laundering

Anti-money laundering (AML) refers to the procedures, laws, and regulations designed to stop the laundering of ‘dirty’ money into the economy. AML laws are far-reaching and respected when it comes to the power they have over business. For example, AML regulations require institutions to complete due-diligence checks on their customers to make sure they aren’t aiding money laundering activities.

Global recognition of the rules and regulations arose when the Financial Action Task Force (FATF) was formed in 1989. This group set international standards for fighting money laundering, and therefore helped to promote a legitimate and clean stable financial market.

The UK’s AML regime has stepped up recently, as 2018 saw the launch of the Office for Professional Body Anti-Money Laundering Supervision (OPBAS). This group improve general standards by working with advisors and law enforcements to prompt for improved cooperation.

Customer Due Diligence

Due diligence means that you take steps to identify your customers by checking they are who they say they are to increase vigilance and security. This is so you can be sure of who you are doing business with, reducing the chances of problems occurring in the future.

If you fail to check out the background of your customers, you could be used to carry out money laundering, something that means you become tainted if the ‘dirty’ money moves through your business, whether you realise it or not.

Due diligence is an integral part of the buying process for both sellers and buyers because it checks out the assets, liabilities, cash flow, and general financial management of the customer in question. This will either give you peace of mind before getting involved with them, or it keeps you out of the way of the wrong people that are wanting to exploit your business.

Although it can be seen as time wasting, it is a vital step to take in the buying and selling process to stop you from going into business with a group that could cause harm in the future – better to be safe than sorry!

Internal controls and monitoring

A business must make sure that it has adequate internal controls and monitoring systems to avoid becoming the next victim of money launderers. These controls should alert anyone relevant within the business if criminals are attempting to use the company for laundering. Once the right people have been informed, they can take the right steps to prevent the threat from becoming anything more.

Your controls should include:

1. Having a ‘nominated officer’ creates a figure within the business that employees can report to
2. If you have a larger and more complex business, have a compliance officer can help maintain an understanding across the workforce around the rules they should be following
3. Making sure the senior managers know are aware of their responsibilities and importance in the process of AML, providing them with regular information on the risks in money laundering
4. Providing relevant training to employees to create a climate of shared understanding and compliance that take the risks into account in the every-day running of the business
5. Recording and regularly updating you AML policies, controls and procedures by completing a policy statement (and sticking to it!)

What is Anti-Money Laundering?

Anti-Money Laundering (AML) refers to the procedures, laws, and regulations designed to stop the practice of generating income from and for criminal practices. It does so by making it hard to disguise the origins and the destination of money, rendering it useless to criminals and, indeed, terrorists who rely on secrecy and discretion to avoid attention.

AML regulations require institutions to complete due-diligence checks on their customers to make sure they are who they say they are and that they aren’t aiding money laundering activities. The responsibility falls on the organisation to carry out the required protocol and works by increasing vigilance and making it impossible to fly beneath the radar.

Global recognition around AML rules and regulations rose when the Financial Action Task Force (FATF) was formed in 1989 because it set international standards for fighting money laundering. Groups like the FATF help to maintain and promote the ethical and economic advantages of a legally credible and stable financial market.

The UK’s AML regime has stepped up recently, as 2018 saw the launch of the new watchdog to strengthen the defences against laundering and terrorist financing. The Office for Professional Body Anti-Money Laundering Supervision (OPBAS) is a group within the Financial Conduct Authority (FCA). They will work with AML supervisors to help improve general standards as well as working with law enforcements to prompt for improved cooperation.

Combating Terrorist Financing

Terrorist financing describes the activities that are carried out in order to provide financial support for acts of terror. It often works by using legally obtained assets to carry out illegal and violent activities. Financing can come from innocent sources, such as charitable organisations as well as legitimate businesses – but it can facilitate unthinkable things to happen. That’s why terrorists often don’t need to launder money in the first instance, but often need to reverse the laundering and disguise its destination instead.

The need for training facilities, equipment, and travel for terrorists means that they look to legal sources to fund their illegal plans. They may often find funding from states, private individuals, and organisations, because, sadly, there will always be people with the same opinions somewhere in the world that are willing to donate money towards the cause.

Terrorists can then either tap into the financial system to move the funds or move physical cash around (hidden, for example, in international packages). This is why the financial services within the regulated sector have features and measures in place to monitor suspicious trends. The AML regimes therefore serve as a way to fight against terrorism financing through tightening the rules and regulations that businesses have to follow, reducing their chances of raising funds for terrorism, whether they realise they’re doing it or not!

Money laundering is the process of making money through a crime of some kind, and then trying to make the money appear legitimate to blend in and avoid suspicion. In other words, criminals make money from one source illegally, then go on to make it look like it came from a different, non-illegal source. Without laundering the money first, criminals would struggle to use it for large purchases without raising suspicion and alerting the authorities.

The term “laundering” refers to the fact that criminals ‘clean’ or disguise money gained from crime to make it seem like legitimate income. This is achieved in numerous ways, such as spreading the money throughout many bank accounts, investing in businesses, or transferring funds abroad. Laundering’s aim is to make it difficult for the authorities to trace proceeds of crime back to the crime itself.

Money Laundering Steps

Criminals follow three stages in order to successfully launder money. Following them closely means that they can turn ‘dirty’ money ‘clean’ and get away with the profit of their crime without anyone taking any notice.

The Placement Stage:

Money laundering starts the moment that the money has been gained through the crime. This is when the placement stage takes place, as the proceeds of the crime make their initial entry into the financial system, the first step towards the money appearing to be clean.

This stage can occur in a number of ways, e.g.:

• Cash could be smuggled into the country
• Loans could be paid off with the illegal proceeds
• The money could be used for gambling
• Purchasing foreign money with the illegal funds

The Layering Stage:

Sometimes referred to as ‘structuring’, this stage is the most complex, often involving international movement of the funds. This is the point when the criminal wants to cut off the links between the crime and the money. This works by layering financial transactions to obscure the trail that the authorities could follow to find the origin of the money.

Launderers do this by moving the funds around, more often than not between countries. As they do this, the money is split up into smaller amounts to invest into advanced financial options, constantly moving them as they go to exploit the loopholes in legislation before anyone realises to suspect anything.

The Integration Stage:

This is the final part of the process because this is when the illegally obtained money is returned to the criminal. Through following the previous two steps, they have taken the money on a journey with the intention of cutting ties it has with the crime, and now it is ready to come back to them.

Having been placed initially as cash and layered through a number of financial transactions, the proceeds of the crime are now fully integrated into the financial system and can be used for any purpose.

The criminals go about this carefully to avoid attracting the wrong attention. This can be by spending the money in common ways, enjoying their illegal profit without ever raising suspicions.

The Case of Sani Abacha

Abacha, a military dictator in Nigeria managed to transfer around £5 billion of national funds into foreign bank accounts, equating as much as 10% of Nigeria’s national income.

His position of power meant that he was able to gain unauthorised access to large sums of money, and is now being named as one of the most corrupt leaders in recent history. Although some of the money was recovered, to this day the majority is still lost from Nigeria due to Abacha and his family.

If your business is part of the regulated sector then you need to ensure you meet the day-to-day standards set by the FSA (Financial Services Authority). These standards exist to help prevent money laundering by raising awareness, vigilance, and setting firm protocols for employees to follow whenever money laundering is suspected.

The Process of Responding to Concerns

As well as following the rules and regulations to help prevent money laundering, and carrying out due diligence checks on potential customers, it’s important that members of staff understand the procedure for reporting money laundering suspicions. The quicker problems are reported, the quicker the issue can be assessed and dealt with – this is good for all involved.

1. If employees become suspicious that money laundering may be occurring, their port of call should be the organisation’s nominated officer. This position means they hold responsibility for sending a report to the National Crime Agency (NCA). The nominated officer is there to assess and manage suspicions, working out what needs to be reported and what can be dealt with within the business.
2. Once they have assessed the severity of the issue, the nominated officer may then decide to submit a suspicious activity report (SAR) to the NCA. It is easy enough to send the report online.
3. The NCA receives the SAR, and uses it to identify the proceeds of crime. From there, they can pass the information onto the relevant authorities and police so that the appropriate action can be taken.

Warning Signs

There are many things that could spark you or your employees to become suspicious about a transaction or activity. Usually, it’s because something unusual occurs within a process – and it’s better to be safe than sorry.

• Reluctance to Provide Information: If the customer is secretive and evasive, then you should take it as a red flag. It sounds obvious, but if they’re reluctant to disclose any information, data or documents that you need, you should avoid going into business with them.
• Incomplete or Inconsistent Information: Accountants should be on the lookout for companies using multiple tax IDs or documents that cannot be verified.
• Irregular Money Transfers and Transactions: Money changing hands in unusual ways should always raise concerns. If there doesn’t seem to be a business relationship between two parties, but there is a movement of assets between them, suspicions should be raised. Unusually high turnover from cash-based businesses are another warning sign.
• Complex Group Structures: Criminal schemes are often sophisticated. If there is a complex structure with no explanation behind it, look into it further. The complexity could be covering up the layering and integration stages of money laundering without others noticing.
• Negative Reviews: It may sound obvious but if there are negative reviews of a customer, it’s probably best to stay well clear.

Organisations need to implement effective anti-money laundering policies in order to remain compliant with legislation and maintain credibility. If they fail to do so, the results could be detrimental to their future. Money laundering can damage reputations, customer/business relationships, and your organisation’s financial stability – not to mention funding criminal activity and even terrorism. Organisations that are part of the regulated sector (regulated by the Financial Services Authority) are required to meet the day-to-day standards set to prevent money laundering, and must remain compliant with the below standards.

The Steps Towards Anti-Money Laundering Compliance:

Customer Due Diligence

• Due diligence means checking that your customers are who they say they are to increase security. This is so you know exactly who you are doing businesses with, reducing the chances of problems occurring in the future due to dodgy connections.
• Failing to train staff to carry out proper KYC (know your customer) checks means you could become a target for criminals looking to commit money laundering offences. This means you become involved in a crime – even if you never realise it.
• The checks have a win-win result because they’ll either give you peace of mind before creating a new business link, or it keeps you out of the way of the wrong people that are wanting to exploit your business. When it comes to anti-money laundering, vigilance is key.

Internal Controls and Monitoring

• A business must have efficient internal controls and monitoring systems to avoid becoming the next victim of money laundering. This should alert anyone within the business if criminals are attempting to use the company for laundering, they can take the right steps to prevent the threat from progressing to an incident.

Your controls should include:

1. A nominated officer creates a figure within the business that employees can report issues to when needed.
2. For businesses of higher complexity, having a compliance officer can maintain a shared understanding throughout the whole workforce.
3. Make sure that the senior managers know their responsibilities and importance in the process of AML, providing them with regular information on the risks in money laundering.
4. Providing relevant training to employees means that your first line of defence is well prepared to deal with threats that come their way.
5. Recording and regularly updating you AML policies, controls and procedures by completing a policy statement (and sticking to it!)

Legislation Awareness

There are three main pieces of legislation that businesses need to be aware of to be compliant:

Proceeds of Crime Act 2002 (POCA)

• This Act is concerned with recovering assets that have been gained through crime, also known as the proceeds of crime. The Act meant that the confiscation and recovery of assets could suddenly occur before a conviction had taken place, speedy up the whole process.
• The primary aim is to reduce the number of loop-holes in the financial system in order to reduce the chances of criminals having success, it does this by taking away their motivations – money and assets.
• POCA is clearly doing something right, as £746 million of criminal assets were seized between 2010 and 2014, as well as more than £2.5 billion worth of assets being frozen, preventing criminals from being able to use them.

Terrorism Act 2000

• This is the UK’s permanent anti-terrorism legislation, looking to combat the global problems in terrorism, and the financing that comes with it, something that comes from reverse money laundering.
• Terrorist operations are often fuelled from legitimate sources of money through the process of reverse money laundering. By using this clean money for deadly causes, they are tainting it rather than trying to make it blend in with normality, which is why it’s called reverse laundering.

The Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017

• This Act moves the European Union’s Fourth Anti-Money Laundering Directive (4 MLD) into UK national law. It replaces the Money Laundering Regulations as well as the Transfer of Funds Regulations, both regulations from 2007.
• These developments have a risk-based approach to money laundering. Through controls and procedures such as customer due diligence, regular record keeping and imposing a number of obligations on senior management and employers. Organisations must keep up with the changes to ensure that the more efficient policies and procedures are in place to deal with the risks they could face.

Offshore accounts are accounts that exist outside of your home country, allowing you to save money and make transactions in different currencies. Offshore accounts operate in another jurisdiction, meaning that they are outside the legal power/judgement of your residential country. Usually, having an offshore account means that individuals enjoy tax benefits since the money avoids taxation in their home country, and there may not be similar taxes to pay in the country the account is set up in. Whilst there a lots of reasons a person or organisation may benefit from an offshore account, some countries also have a less regulated and less stringent financial sector than, say, here in the UK. This means they may attract criminal customers who want to bank their money off the radar. It is for this reason that some countries are known as ‘high risk’ to do business with or accept transactions from.

Using the offshore accounts can open up a channel of professional services abroad, and also encourages global business expansion, trading, investments and growth – all qualities that lead to a strong economy. As above, though, some offshore accounts exist simply to avoid taxation, which can detriment the UK economy. Some popular places to hold offshore accounts for UK residents include the Crown Dependencies of Guernsey, Jersey, and the Isle of Man, Monaco, Switzerland, and Lichtenstein.

Whilst an onshore account is generally considered to be a business/current/savings account within the individual’s country of residence, offshore accounts are used for different types of savings accounts and sometimes have links to foreign stock markets.

Depending on the offshore bank, the minimum account opening balance differs. This can start at £10,000 and go all the way up to £100,000 depending on the type of customer they are dealing with, and what the accounts are for.

The links between offshore accounts and ‘tax-havens’ is because the interest on the accounts is paid without the prior deduction of tax. It is up to the individual to declare income from offshore bank accounts to their relevant tax authorities, and because this is their responsibility, people find ways to avoid it and therefore pay less tax by failing to declare extra income. You may have seen offshore accounts linked with ‘tax dodging’ in the media.

Two Sides to the Coin

Offshore accounts aren’t always used with the aim of avoiding tax, there are legitimate reasons to use them too depending on different circumstances. Plus, the media has a big part to play in the presentation of offshore accounts, in reality the account holders still need to pay tax because you are still liable for tax on the interest you earn in the same way you would be in the UK. So despite the misconceptions, there is nothing illegal about offshore accounts, it’s how the owner conducts business that counts.

• If you are a retired British Expatriate and have savings which you would like to invest, then an offshore account is best for you. This is because if you’re a resident overseas, most UK banks and buildings won’t allow you to open a new savings account whilst the offshore accounts will accept it.
• If you aren’t a British Citizen and you’ve acquired wealth (possibly through inheritance, investment or working in a sterling economy), but you’re now a resident outside of the UK, then an offshore bank may support your sterling savings.
• If you are an expatriate worker and move between countries periodically, having an offshore account for your savings in an independent location can be more convenient than constantly having to open and close savings accounts with each change of residence.
• Of course you may be resident in an offshore jurisdiction full time, so a local offshore bank may be conveniently located.

The Positives to Offshore Accounts:

• Ability to bank in foreign countries
• Quite often tends to be a higher interest rate
• You can delay tax payments with them
• Reduces the risks in currently fluctuations

And the Negatives:

• They can be difficult to open
• They can have higher everyday fees (i.e. withdrawal fees)
• Limited levels of protection
• Tax does still needs to be paid, despite what people think

Our Anti Money Laundering Courses

The Proceeds of Crime Act (POCA) published in 2002 changed the way we understand money laundering offences. Money laundering or conspiracy/attempt to money launder is an offence under sections 327-329 of the POCA.
To put it simply, the POCA discusses and defines offences in money laundering as the following:
A person commits an offence if he/she…

• Conceals criminal property
• Disguises criminal property
• Converts criminal property
• Transfers criminal property
• Removes criminal property from the UK
• Enters into an arrangement which he/she suspects facilitates the control of criminal property by or on behalf of another person
• Acquires criminal property
• Uses criminal property
• Has possession of criminal property

So as you can see, organisations don’t need to know that they have been involved in a crime to become legally involved, and become tainted by it as a result. The whole focus is on the “criminal property” otherwise known as money/assets gained from crime. The point of laundering is to make the criminal property blend in with normal financial practices, essentially getting lost in the system before anyone can track it down or track it back to the crime.
This worry makes it all the more important that companies do what they can to avoid getting involved in money laundering, as it could result in unlimited fines and reputational damage. By understanding the threats out there, and having an efficient policy prepared, organisations can prevent themselves becoming the next victim of laundering, increasing success and stability as a result.

5 Money Laundering Offences:
1. Tax evasion

• This is when people use offshore accounts to avoid declaring their full income level, and as a result they can avoid paying their full amount in tax.
• Possibly one of the most well-known tax avoiders in recent years is the famous comedian, Jimmy Carr. Using a Jersey-based account, he was able to avoid paying higher taxes back in 2012 by sheltering £3.3 million per year of his assets.

2. Theft

• Probably the most straightforward crime, theft becomes money laundering once it has actually happened. The criminals then try to take the proceeds of the crime and move them into the economy without people noticing, and as a result it becomes much more unlikely that it will ever be tracked down.
• An example of this came with an accountant from South Wales in February 2018. Jeffrey Bevan was working for the Bermudan government when he stole and laundered £1.3 million. His position as head of expenditure meant he had access to a lot of money, something he took advantage of. Bevan laundered the money through his UK bank accounts, claiming it all as legitimate overtime. As a result he was sentenced to seven years and four months in prison.

3. Fraud

• Crime related to fraud generates money that needs to be laundered for the criminals to use it without raising suspicion, so where there is fraud there is money laundering. Many organisations actually have a department that is dedicated to preventing money laundering and fraud.

4. Bribery

• Bribery can occur in money laundering when it comes to politically exposed persons, also known as PEPs. PEPs are a big threat when it comes to money laundering because of their status in society. This status makes them a higher risk customer for companies to work with because they have more chances to gain assets through illegal methods compared to regular public citizens. As soon as corrupt PEPs accept bribes, money laundering can take place.
• Bribery is a serious global issue because it has significant effects on economic development, political stability and international crime.

5. Terrorist Financing

• More often the not, terrorist activities are being financed through a technique called reverse money laundering. It is reverse because it works by using legal assets to carry out illegal activities, in this case terrorism. The ‘clean’ money can come from the least suspicious sources such as charitable organisations, as well as legitimate businesses.
• The 9/11 terrorist attack was facilitated by reverse money laundering. Money from the United Arab Emirates passed through a New York bank account before reaching the accounts of the hijackers in Florida. It was also revealed that the terrorists actually carried bundles of cash straight into the country.

Our Anti Money Laundering Courses