3 minute read
Protect your business from money laundering - and comply with the law
It’s a fact of life that legitimate businesses are targeted by those operating outside of the law. For a wide range of companies in the Gatwick Diamond and beyond, one of the risks they face and must manage is money laundering. And with that, they must ensure they are compliant with the law.
What is money laundering?
The term is used to describe the act of converting the proceeds of crime into useable, ready funds by disguising its origins. It costs the UK economy more than £100 billion a year while at the same time contributing to both criminal and terrorist organisations.
Money laundering is hugely damaging on many levels, so stringent laws are in place for good reason. Indeed, hundreds of companies, including a number in the Gatwick Diamond area, were hit with fines for non-compliance with anti-money laundering (AML) legislation in 2022-2023, according to recent figures. One of the most common offences? ‘Failing to apply for registration at the required time', with individual fines ranging from £1500.00 to £53,000.00!
Are we just talking about accountants and bookkeepers here?
No, criminals have become adept at using a whole variety of ways to retain, disguise and conceal the proceeds of their crimes. It is why the UK Government in 2023 announced a renewed focus on money laundering and terrorist financing.
Broadly speaking, all money services businesses and those handling significant financial transactions are potential targets for money launderers. The legislation identifies the following business activities:
• Banking and financial services
• Independent legal professionals
• Estate and Lettings agents
• Casinos
• Professional service accounting firms (including Bookkeepers)
• Trust and Company Service providers
• Art and antiques
• High value dealers
How to protect your company
Once registered, your company then needs to put in place solid policies and procedures to protect it from money launderers. Here are some of the important steps you need to consider:
• Complete and document robust business wide and client risk assessments. This will help with putting the necessary procedures in place to counteract any risks posed to the company.
• Customer Due Diligence is a fundamental AML practice requiring service providers to verify and understand their clients. It ensures that you know who you're doing business with, reducing the risk of facilitating money laundering.
• Maintain comprehensive records which involves keeping accurate and up-to-date documentation of client interactions and transactions.
• Training your employees is essential to ensure that staff members are well-versed in AML policies and procedures.
• Engaging with independent audits is a crucial role in gaining an impartial validation of the effectiveness of your AML processes.
Compliance and Privacy Solutions Ltd is a consultancy specialising in Data Protection and Anti Money Laundering compliance. Need help with your compliance? Give CaPS a call on 0330 2020 601 or visit caps-ltd.co.uk/contact-us
