Prevention of money laundering - a brief note
"Money laundering" is the process by which the proceeds of crime are made to look legitimate. Originally, it related only to the proceeds of drugs-related and arms-related crimes, but it now relates to the proceeds (however small) of any crime (however minor). It is all too easy to be caught by this wide-ranging legislation.
In addition to avoiding involvement in money laundering, specific government regulations now require solicitors and other professionals, such as accountants and stockbrokers -
- to investigate the background to transactions in which they are involved
- to report suspicious circumstances to the law enforcement authorities and
- not to disclose to their clients if they make such a report.
- to carry out an extensive range of identification procedures for new clients
If a report is made, the transaction will be delayed while the authorities consider the information.
To minimise the extra cost, delay, inconvenience and risk of a report being made, it is vitally important that you co-operate with me in supplying, promptly on request, proof of identity, background information, and details such as the source or destination of funds relating to any transaction. This will, I hope, avoid any suspicious circumstances arising, and therefore avoid the need for a report to be made.
The particular information and documentation that I will need will depend on each client's particular transaction and circumstances, but the following will give you an idea of what might be involved -
- Each new individual client will need to prove their identity and address at the outset of the transaction or work. This will usually be by producing a document linking a name with a photograph (eg: a current passport or photo-card driver's licence ) and documents linking the name with a permanent address (EEG: two recent utility bills ).
- Also, I will need your National Insurance number ; coincidentally or not, I will also need this to complete (for example) a Stamp Duty Land Tax return.
- Every new company client will need to provide (or pay for me to obtain) a copy of its certificate of incorporation and memorandum and articles of association , and details of its officers and shareholders. Proof of identity will also be needed for each officer and significant shareholder, in the same way as for individual clients.
- Do not credit any funds to my bank accounts without my consent - otherwise, those funds may be rejected or frozen, if not by me, then by my bank, which is also subject to the regulations
- I will need to know the source of any incoming funds and, if they are not coming from the specific client involved, why they are being paid for that client's benefit.
- If I am asked to send any funds to someone who is not the relevant client or otherwise clearly involved in the transaction, I will need to know why they are to be sent to that person
I realise that completing the extra paperwork and answering the extra questions involved in complying with the money laundering legislation will be irritating and time-consuming for both of us, but please remember that co-operation should keep both of us out of trouble with the authorities!
