Money laundering and Money service businesses
Money laundering includes how criminals change money and other assets into clean money or assets that have no obvious link to their criminal origins. Money laundering takes many forms such as:
- Money transmission
- Third party cheque cashing
- Currency exchanges
Terrorist financing
Terrorist financing involves dealing with money or property that you’ve reasonable cause to suspect may be used for terrorism. The funds and property may be from legitimate sources or criminal sources. They may be in small amounts.
Legislation
The main UK legislation covering anti money laundering and counter-financing of terrorism is:
- Proceeds of Crime Act 2002
- Terrorism Act 2000
- Money Laundering Regulations 2007
The following legislation applies to money transmission businesses only:
- The Transfer of Funds (Information on the Payer) Regulations 2007 No 3298
- Regulation (EC) No 1781/2006 on information on the payer accompanying transfers of funds (the Payments Regulation)
Responsibilities of senior management
The main UK legislation covering anti money laundering and counter-financing of terrorism is:
- Proceeds of Crime Act 2002
- Terrorism Act 2000
- Money Laundering Regulations 2007
The following legislation applies to money transmission businesses only:
- The Transfer of Funds (Information on the Payer) Regulations 2007 No 3298
- Regulation (EC) No 1781/2006 on information on the payer accompanying transfers of funds (the Payments Regulation)
Policies and procedures
Company has put in place appropriate policies and procedures that reflect the degree of risk associated with the business and its customers. These are:
- customer due diligence measures and on-going monitoring
- reporting suspicious activity
- record keeping
- internal controls
- risk assessment and management
- monitoring and managing compliance
- internal communication of these policies and procedures, including to any branches and subsidiaries outside the UK
- staff training
Effectiveness of the controls
Managing the money laundering and terrorist financing risks to business is an on-going process, not a one-off exercise. Connect Plus Business Limited documents the risk assessment procedures and controls, such as internal compliance audits, as this helps to keep them under regular review. We have a process for monitoring whether they are working effectively, and how to improve them, for example to reflect changes in the business environment, such as new product types or business models.
Customer due diligence
Connect Plus Business Limited checks that customers are who they say they are. This is often referred to as ’know your customer, or customer due diligence. The following are the minimum requirements and actions we need to take to do customer due diligence in relation to:
- customers, who may be individuals or businesses in or outside the UK
- beneficial owners
- business relationships
- occasional transactions
- Sanction check
- politically exposed persons
Reporting suspicious activity
Suspicious Activity Report (SAR) is the name given to a report to the National Crime Agency under the Proceeds of Crime Act or the Terrorism Act. The report details individuals or a business who may be involved in laundering money or financing terrorists. We have following policies and procedures:
- staff must raise an internal report where they know or suspect, or have reason to believe, that another person is engaged in money laundering, or that terrorist property exists
- nominated officer must consider all internal reports - the officer must make a report to the National Crime Agency as soon as it’s feasible to do so, even if no transaction takes place, if the officer considers that there's knowledge, suspicion, or reasonable belief that another person is engaged in money laundering, or financing terrorism
- we seek consent from the National Crime Agency before proceeding with a suspicious transaction or entering into arrangements if it’s to provide itself with a defence to a charge of money laundering
- it’s a criminal offence for anyone to do or say anything that 'tips off' another person that a disclosure has been made where the tip-off is likely to prejudice any investigation that might take place
Record keeping
Connect Plus Business Limited have following policies regarding record keeping:
- copies of, or references to, the evidence obtained of a customer’s identity, for 5 years after the end of the business relationship
- details of customer transactions for 5 years from the date of the transaction
- details of actions taken in respect of internal and external suspicion reports
- details of information considered by the nominated officer in respect of an internal report, where the nominated officer does not make an external report
Staff awareness and training
Connect Plus Business Limited must ensure that relevant staffs:
- are aware of the risks of money laundering and terrorist financing, the relevant legislation, and their obligations under that legislation
- know who the nominated officer is and what his responsibilities are
- train in the firm’s procedures and in how to recognise and deal with potential money laundering or terrorist financing transactions or activity
- train at regular intervals, and that you record the details.
Principal-agent relationships and other business models
Connect Plus Business Limited must enter into contractual arrangements with other parties to enable us to provide services to customers, typically as follows:
- appointing an agent or agents to act on behalf of a Connect Plus Business Limited (the principal)
- accepting instructions from one or more other Money Service Businesses, for example by acting as a wholesaler in order to aggregate many low value transactions submitted by other Money Service Businesses.