‘Bin bags full of cash’ NatWest fined £264m for AML failures

‘Bin bags full of cash’ NatWest fined £264m for AML failures

Branch safes literally overflowed with ill-gotten gains

In the first criminal prosecution of a financial institution by the Financial Conduct Authority (FCA), a litany of failings took place at NatWest which enabled black bin liners stuffed with cash to be deposited, literally bursting out of floor-to-ceiling branch safes.

The trial centred on a textbook case of money laundering by a supposed jeweller, Fowler Oldfield. Their predicted turnover was around £15m when the bank took them on as a client, but they ended up depositing over £365m over a five year period, with the vast majority being in hard cash.

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VinciWorks by the numbers: 2021 – a year in review

2021 saw another successful year for VinciWorks. We haven’t simply done more of what we already do so well, we have also added all-new features to our training, such as the ability to build out every aspect of each course in minutes. Our research and development team have built out multiple new Omnitrack use cases and we are constantly adding new features, the most recent being our DocuSign integration. All our hard work was recognised in October when we were acquired by Marlowe PLC.

Here are some of the highlights from 2021.

755,000 courses delivered

Whether or not your business has reverted to in-office working, has continued with a remote-working policy, or somewhere in between, the pandemic taught us the importance of flexibility. Over the past 2 years, e-learning has supplanted nearly all classroom training. Companies that traditionally ran in-person compliance training have moved over to online learning for good.

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The EU Whistleblower Protection Directive: Are You Ready?

The EU Whistleblower Protection Directive: Are You Ready?

New rules come into force across the EU on Friday, 17 December 2021

Whistleblowers are a vital part of society, working to expose wrongdoing at the highest levels and often at great personal risk to themselves. That’s why the European Union passed legislation in 2019 to give whistleblowers more protection against retaliation. Every country in the 27-member bloc is expected to implement this directive into their national laws by Friday, 17 December 2021.

While some countries do lag behind, there are a minimum set of whistleblowing standards that should be adhered to. Companies doing business anywhere in the EU should ensure that their internal policies and procedures comply with the Whistleblowing Directive, regardless of upcoming changes to national laws. Some countries like the UK, France and Luxembourg have had whistleblower protections in place for some time.

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Should you hire an ESG consultant?

Should you hire an ESG consultant?

It depends on how committed your business is to ESG

ESG consultants help companies determine what actions they should take to improve and build on their ESG efforts. They can undertake risk assessments, due diligence and impact assessments, as well as help to prepare reports and measure impacts.

They can also help to develop the right structures and processes inside the organisation if you are preparing for ESG disclosures. If you’re just getting started with ESG, you should also read our explanatory guide: ESG: What Businesses Need to Know. That guide provides a summary of the key terms and concepts you should be aware of before diving into ESG in more depth.

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New course release: Vulnerable Customers in Financial Services

A recent report estimated that 27.7m UK adults could be considered to be living in vulnerable circumstances, an increase of 15% in just a few months, with 2021 expected to show a further increase. This equates to 53% of the UK adult population – i.e., more than half.

Who are the vulnerable customers?

A vulnerable customer is someone who, due to their personal circumstances, is especially susceptible to harm, particularly when a firm is not acting with appropriate levels of care. 

The FCA expects firms to demonstrate how they are ensuring vulnerable customers are treated fairly. This includes recording and monitoring to ensure the service provided to vulnerable customers is as good as those provided to other customers.

What is a vulnerable customer example?

Being vulnerable is not necessarily a life-long state: it can be long term, short term, or permanent. Vulnerability drivers could include the following examples:

  • Health – health conditions or illnesses that affect ability to carry out day-to-day tasks.
  • Life events – life events such as bereavement, job loss or relationship breakdown. 
  • Resilience –low ability to withstand financial or emotional shocks. 
  • Capability – low knowledge of financial matters or low confidence in managing money

Who do the FCA consider to be particularly vulnerable?

Certain life events can trigger additional or increasing vulnerabilities. Consumers who already have lower financial literacy or capacity may be even harder hit and unable to manage their finances.

How do you assist vulnerable customers?

You need to understand your customer base and target market so you can correctly identify potentially vulnerable consumers and those who are more likely to require support.

For example, if you advise on pensions or life insurance, your customer base is likely to be older. You must be more alert to signs of illness or disability. 

You must also be aware of how your actions or inactions could increase vulnerability and cause harm. For example, not offering a customer who loses their source of income appropriate forbearance measures could lead to greater stress and anxiety, which in turn leads to the customer taking actions which are more harmful such as borrowing more to cover shortfalls.

The FCA expects your firm to have procedures in place to identify vulnerable customers, including if they access your services digitally, and to know how to respond appropriately.

VinciWorks new course: Vulnerable customers in financial services

Our new course, Vulnerable Clients in Financial Services, teaches users what makes people vulnerable, what the signs and characteristics of vulnerability are in specific target markets and customer bases, and how to provide an appropriate level of care to vulnerable customers.

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Gig economy workers throughout the EU are about to become employees

Gig economy workers throughout the EU are about to become employees

The gig economy in Europe

The gig economy in Europe, also known as the platform economy or sharing economy, has experienced significant growth in recent years. It refers to a labour market characterised by short-term, flexible, and on-demand work arrangements facilitated by digital platforms. One key aspect of the gig economy in Europe is the prevalence of online platforms that connect workers with customers, such as Uber, Deliveroo, and TaskRabbit. These platforms provide individuals with opportunities to earn income by offering their services in various fields, including transportation, food delivery, and household tasks.

What are gig economy workers?

Gig economy workers, also known as gig workers or platform workers, are individuals who participate in the gig economy. They are typically independent contractors or freelancers who perform short-term, flexible, and on-demand work for various digital platforms or online marketplaces.

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New Guide: UK MDR: What changes are in store? | Free download

DAC6 and UK MDR

In 2018 the OECD developed Model Mandatory Disclosure Rules for CRS Avoidance Arrangements and Opaque Offshore Structures (“OECD’s Model Rules”). These rules require taxpayers and their advisers to report information to tax authorities on certain types of arrangements and structures that might facilitate tax evasion.

The EU responded to the OECD’s mandatory disclosure rules by introducing the EU Council Directive 2011/16, more commonly known as DAC6. As of January 2021, reporting under DAC6 was mandatory in all EU Member States.

Prior to the UK’s exit from the European Union, the UK government intended to adhere to the DAC6 regulations in line with the other EU member States. But at the spring Budget 2021, the UK government announced that DAC6 would be replaced with model rules in line with the OECD’s Model Rules. The consultation released on 30 November 2021 relates to the draft regulations to implement UK MDR, which means that the rules will apply on a global, rather than an EU, level following Brexit.

What is the UK MDR?

UK MDR refers to the UK’s Mandatory Disclosure Rules, the new regulations that came into force in summer 2022 and replace the current UK DAC6 regulations. The regulations are aimed at preventing tax evasion by requiring taxpayers and intermediaries to disclose information on certain types of arrangements and structures to HMRC. The UK MDR limited the regulations as they existed under DAC6 to apply to only those arrangements that would be reportable under the OECD’s Model Rules.

New Changes in UK MDR: Free Guide

VinciWorks has developed a guide to UK MDR that goes through everything you need to know on the subject. The topics covered in the overview include an overview of the UK’s approach, how UK MDR will be different from DAC6, timelines for implementation, and what will happen to the existing DAC6 regulations in the UK. The guide then goes on to cover information about historic reporting periods, intermediaries, taxpayers, hallmarks, reporting obligations, penalties, and reporting format. Finally, the guide introduces VinciWorks’ own DAC6 and MDR reporting solution. 

For a free download of the comprehensive guide, click here. 

VinciWorks’ DAC6 and MDR reporting solution

VinciWorks has built a robust MDR reporting solution providing intermediaries such as law firms, accounting firms and multinational businesses with the expertise, knowledge and technical infrastructure to report and manage cross-border transactions. From one centralised system, organisations can fulfil their reporting requirements across every EU member state as well as every country that has introduced the OECD’s MDR into law. Built in consultation with over 100 leading international firms, international tax experts, HMRC and other regulators, our tool features customisable workflows designed and updated for the intricacies of each EU country’s implementation of the rules. We offer a number of hosting options to suit any organisation’s needs, including on-premises hosting.

Features include:

  • Built-in guidance on whether a transaction is reportable
  • Reminders for reporting deadlines and reviewing ongoing transactions
  • Customisable dashboard to make it easier to stay on top of deadlines
  • Customisable workflow to easily collect all pertinent data
  • Built for international firms with different workflows and reporting for every relevant country

Choose from a number of hosting options, including cloud hosting and on-premises hosting

The LSAG AML Guidance: What Law Firms Need to Know (Download the Free Guide)

What is the Legal Sector Affinity Group AML Guidance?

The Legal Sector Affinity Group (LSAG) has published its Anti-Money Laundering guidance for the Legal Sector 2021. As set out in its background, LSAG aims to “aid… compliance and to effectively protect against Money Laundering and Terrorist Financing risks”. The LSAG guidance is an invaluable aid to those in the legal sector, and has been written in light of changes to the Regulations. While an invaluable aid to those in the legal sector, the complex guidance is over 200 pages long.

Why is Anti-Money Laundering Guidance for the Legal Sector Important?

Though it is not officially mandatory, the LSAG guidance is vital for protecting your practice. The SRA website says that “for firms supervised by the SRA for AML [the LSAG guidance] now constitutes official guidance,” and as stated at the start of the guidance, “legal sector supervisors will consider whether a legal professional has complied with this guidance when undertaking its role as regulator of professional conduct”.

Core Concepts of the LSAG Guidance – VinciWorks Free Guide

VinciWorks has created a concise guide highlighting the core concepts of the LSAG guidance, including practical tips. The guide includes an introduction to the guidance, an overview of risk assessments, what you need to know about Client Due Diligence (CDD), Enhanced Due Diligence (EDD), and Simple Due Diligence (SDD), and how the use of technologies such as Omnitrack can be helpful in carrying out risk assessments, CDD, ongoing monitoring, and ‘just in time’ training.

Click here for a free download of the guide.

DAC6: UK Mandatory Disclosure Rules Consultation Released

HMRC MDR consultation

On 30 November 2021, HMRC published their draft UK Mandatory Disclosure Rules and released their consultation which seeks views on the design of the draft regulations. The consultation will be open until 8 February 2022.

At the Spring Budget 2021, the UK Government announced that it would implement Mandatory Disclosure Rules(MDR)(2.14). The rules are intended to replace the similar EU DAC6 rules which were implemented in the UK prior to their exit from the European Union. The draft regulations draw closely to the OECD’s Model Mandatory Disclosure Rules for CRS Avoidance Arrangements and Opaque Offshore Structures.

MDR requires advisers (and sometimes taxpayers) to report information to the tax authorities on certain prescribed arrangements and structures including those that could circumvent existing tax transparency reporting rules known as the Common Reporting Standard or hide ownership of assets. 

VinciWorks will be hosting a webinar in the coming weeks with representatives from HMRC to discuss the consultation.

6 ways to adapt your disciplinary and grievance procedure for remote working

Introduction 

At the beginning of the Covid-19 lockdown, many businesses needed to rapidly convert from a physical office to the remote working environment. If you were one of those businesses, you likely have had to tweak your processes to ensure smooth business operations, which might have included your disciplinary and grievance procedures. Before Covid, the idea of conducting a formal disciplinary meeting on a video call might have seemed unthinkable. But now that remote and hybrid working are becoming more permanent arrangements in many organisations, organisations need to have robust disciplinary and grievance procedures that ensure fairness for remote and hybrid workers.

Below are some important things to consider for disciplinary and grievance procedures in a virtual working environment.

 

1. Technology

If it is not possible to hold the formal disciplinary/grievance meeting in person, then videoconferencing may be a suitable alternative. However, every attempt should be made to avoid technical issues that will impact the meeting. Remember, subjects have the right to appeal if any part of the disciplinary or grievance procedure was unfair or handled incorrectly. Subjects may feel that they have been treated unfairly if for example:

  • Technology issues cause undue stress
  • They have trouble accessing the meeting or any of the evidence
  • They could not express themselves effectively due to the media used.

It’s advisable to test the technology beforehand to ensure that all parties can access the meeting without issue, including the person who will accompany the subject and any witnesses. It is also vital to consider any disabilities that would prevent any participant from accessing or participating in the meeting. Alternative arrangements may be required to ensure that the subject receives a fair hearing.

 

2. Privacy and security

Remote disciplinary and grievance meetings present a number of privacy and security considerations. It’s important that the online meeting is secure and that access is restricted only to the relevant people. Participants should be advised of confidentiality requirements prior to the meeting and should be aware that no one else can be present in the room while the meeting is taking place. If you need to distribute documented evidence electronically, this should be carried out in accordance with data protection principles. If you intend to record the meeting, all parties must agree to this in advance. If recording is not permitted, this should be explicitly stated to all attendees. 

 

3. Gathering and distributing documents and evidence

Gathering information and evidence from both sides may be more difficult when working remotely but it is still essential to ensure fairness. Documentation may include personnel files, performance reviews, emails, training records and compliance reports etc. Subjects should:

  • Have access to all documentation and evidence.
  • Be given appropriate time to review in advance of the meeting.
  • Be aware beforehand of any witnesses that will be included in the formal meeting.

 

4. Right to be accompanied

The subject still has the legal right to be accompanied to a formal disciplinary/grievance meeting when attending remotely. They may be accompanied by a colleague, a trade union representative or an official employed by a trade union. The accompanying person may:

  • Take notes on the subject’s behalf.
  • Present the subject’s case.
  • Talk things over with the subject during the meeting.
  • Sum up the subject’s case.

You must ensure that the meeting setup allows the accompanying person to do all of these things, even if they are joining remotely. If the accompanying person is unable to access the meeting, the meeting should be postponed to a suitable date. The alternative time and date must be reasonable and not more than five working days from the original date.

 

5. Is it better to delay?

Considering the challenges associated with remote working, in some cases, it may be better to delay the meeting until it can be conducted in person. In general, unreasonable delays are to be avoided as they can cause additional stress to those involved. However, the risk associated with delays should also be balanced against fairness in these exceptional circumstances. If, for example, the subject cannot access the meeting remotely, the relevant evidence cannot be collected without putting employees at risk or the employee is not able to present their case effectively, then it may be better to delay. Where a delay is necessary, the subject should be notified in writing of the reasons for the delay.

 

6. Prevention

Managers and supervisors should do their best to prevent issues from escalating to the formal stages of disciplinary and grievance procedures. Where possible, issues should be dealt with informally and at an early stage. But it can be more difficult to notice problems arising when staff are working remotely. It’s more important than ever to ensure that communication is open and frequent and that employees know exactly what is expected of them. Ensure that your code of conduct is available to all employees and reflects the current circumstances. Let your remote employees know how to raise problems and concerns informally.

Working remotely is not without its challenges. Be mindful of your employees’ wellbeing and offer the appropriate support, for example, you can:

  • Encourage staff to reach out and ask for help if they need it.
  • Build interpersonal relationships with your staff and regularly check in with them.
  • Encourage employees to take more breaks and stay connected with colleagues.
  • Provide contact details for external mental health support services.

You can also enrol employees in online awareness training on topics such as Mental Health Awareness, Ergonomics, Wellbeing & Remote working, Healthy Living or Mindfulness. There are a number of other online wellbeing eLearning courses that EssentialSkillz offers that can increase awareness around these important topics, helping employees to take better care of their health, safety and wellbeing when working from home.

 

Conclusion

Disciplinary and grievance is one of the many areas that need to be approached differently in the virtual environment. Remote working brings new challenges, but we’ve learned how well businesses can adapt to rapidly changing work environments. With the right procedures and tools in place, issues can still be resolved effectively and fairly while protecting the wellbeing of your employees.