Money Laundering Regulations Overview

Money Laundering Regulations Overview

This blog provides a Money Laundering Regulations Overview. It is based on information from the HMRC web site

Money Laundering Regulations Overview

“Dirty” money is money that is obtained from the proceeds of illegal or criminal activity. Criminals will seek to make this money “Clean” by undertaking a number of activities or transactions, possibly at a financial loss to themselves.

Money Laundering also includes any money that is used to fund terrorism wherever that money comes from. There are a number of different business sectors to which the Money Laundering Regulations apply (e.g. financial / credit agencies and accountants.

Each business covered by Money Laundering regulations must be supervised by supervisory authority. If the business falls within certain business sectors but it not supervised by a supervisory body then it will have to registered to be supervised by HMRC.

The 5 Business sectors that can be supervised by HMRC are:

  • Estate Agency businesses
  • High Value dealers
  • Money Service businesses
  • Accountancy Service providers
  • Trust or Company Service providers

Should your businesses be covered by Money Laundering regulations, certain controls have to be put in place to prevent the business from being used for Money Laundering. Some of these controls are covered on the following slides.

Controls in your Business to prevent Money Laundering

The following controls can be put in place to prevent Money Laundering:-

  • Checking the Identity of your Customers
  • Checking the identity of “Beneficial Owners” of corporate bodies or partnerships
  • Assessing the risk of your business being used by criminals to launder money
  • Monitoring your customers business activities
  • Ensuring that adequate Management Controls are in place
  • Keep all documents relating to Money Laundering and Financial Transactions
  • Ensure Employees are aware of the Regulations and have had adequate training

Money Laundering Regulations Overview

As part of the Anti Money Laundering procedures, each business must appoint a Money Laundering Reporting Officer (MLRO). The MLRO must be told if anyone in the business suspects that another person (either internally or externally) is laundering money or financing terrorism.

Once this suspicion has been reported to the MLRO, they have to assess the situation and decide whether to report to the National Crime Agency (NCA).

Should the MLRO decide that money laundering has taken place, they have to report to the National Crime Agency (NCA) as soon as possible. The NCA will inform the MLRO whether they can complete the transaction or not.


About the author...

George Greer is an experienced ACCA qualified Business Owner with a demonstrated history of working in the accounting industry. He is skilled in Accounts and Finance Management, Budgeting and Business Planning with excellent knowledge of Sage and Xero Products. Strong professional with a BSc focused in Business Computing Systems from City University London.

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