Anti Money Laundering Policy

Transcription

1 Anti Money Laundering Policy Money Laundering Regulations 2003 Proceeds of Crime Act Policy Statement 1.1 Amber Valey Borough Council ( the Council ) has identified therequirements of the Money Laundering Regulations 2003 and Proceeds of Crime Act It will adopt the procedures stated below to ensure compliance. 2. Background 2.1 Money Laundering is the term used for a number of offences involving the integrating of dirty money (i.e. the proceeds of crime) into the mainstream economy. The objective is to legitimise the possession of such monies through circulation and this efectively leads to clean funds being received in exchange. The Money-Laundering Regulations 2003 attempt to provide a preventative solution to this problem. 2.2 The following requirements are reinforced by the money laundering sections of the Proceeds of Crime Act 2002 and the Terrorism Act Requirements of the Money Laundering Regulations The 2003 Regulations require that relevant businesses adopt a number of key measures to counter money laundering. 3.2 There are different obligations under the legislation dependent on the nature of the business or individuals role within the organisation. The Regulations include the following summary of relevant businesses: Investment business Accountancy and audit Money service operators Estate agency work Operating a casino Insolvency practitioners Tax service Providing legal services, including financial or real property transactions

2 Company and Trust formation, operation or management dealing in goods that involve accepting payments in cash of 15,000 Euros ( 10,000 approx.) or more (high value dealers). More relevant to local authorities, however, are the requirements of the Proceeds of Crime Act These stipulate the reporting of suspicions of any potentially ill-gotten gains or attempted recycling thereof. This will have implications for the Council s Benefit ServicesBusiness Unit, amongst others, as technically all suspected instances of fraud would have to be reported to the National Criminal Intelligence Service (NCIS). 3.3 Measures required include: Training of staff to recognise transactions that may indicate money laundering The appointment of a Money-Laundering Reporting Officer who will receive staff disclosures on suspicions of money laundering Verifying the identity of new clients and keeping records of evidence obtained Reporting any suspicious transactions to the National Criminal Intelligence Service (NCIS). 4. Application of the Regulations to Council Activities 4.1 Whilst local authorities are not separately identified in the list of relevant businesses shown in 3.2, there are some local authority activities that could come within the scope of the Money Laundering Regulations, for example: Investments this would cover activities such as the issue of local bonds (not currently undertaken) or transfers to or from non-uk banks Sale of land/buildings (as sale proceeds could be in cash) Receipt of Cash Payments may relate to the sale of goods (e.g. land or equipment) as opposed to services (e.g. NNDR or property rents) However, all services and any suspicious amounts are implicated under the Proceeds of Crime Act The money laundering requirements, from this Council s point of view, are: Provision of training to relevant officers on the requirements of the legislation, including the identification of suspicious transactions, identity verification and reporting procedures Relevant officers have already been identified as Cashiers and Revenues, Treasury Management, Legal, Audit, Property and Benefit Services staff, although every officer in the Council is technically implicated Establishment of procedures for the above officers to report any suspicions to the Money Laundering Reporting Oficer ( MLRO ) e.g. al suspicious cash payments of 1,000 or more 2

3 Designation of an officer as the Money Laundering Reporting Officer, who will receive any reports, keep records and if considered appropriate, make reports to the National Criminal Intelligence Service (NCIS) Revision of existing Treasury Management Practices to take account of the revised requirements, particularly in respect of training for staff, investment and borrowing counterparties and reporting. 5. Procedures Each relevant officer should in the course of Council business implement: 5.1 Identification procedures (SI 2003/3075 Money Laundering Regulations, 4 & 5): These regulations apply if: a). The Council is forming a business relationship; or b). Considering undertaking a one-off transaction, and i). Suspect a transaction involves money laundering; or ii). A payment is to be made for 15,000 or more (approximately 10,000); c). In respect of two or more one-off transactions that the transactions are linked and involve 15,000 or more In these instances the Council will: a). Set up and maintain identification procedures to ensure the client produces satisfactory evidence of his or her identity; b). Follow the procedures to ensure the client provides satisfactory evidence. These procedures should reflect: a). The greater potential for money laundering if the client is not physically present when being identified; b). If satisfactory evidence is not obtained the relationship or transaction does not proceed c). If the client acts, or appears to act, for another person, reasonable measures must be taken for the purpose of identifying that person. The primary exception to this requirement is if the client carries on FSA regulated business in the UK (or comparable by overseas regulatory authority) it is not required that the officer obtain evidence. In this case, most treasury transactions will be undertaken with or via relevant businesses, although there may be isolated exceptions such as the Post Office. If any treasury investment clients are not known to the Council the treasury officer will ensure their identification by checking the credit-rating of the firm via the Council s treasury advisers. However, even when dealing via a broker it is stil the Council s ultimate responsibility to verify the counterparty, not the broker s. This would normaly be undertaken during the compilation of the counterparty list. If the client is neither credit-rated nor known to be carrying on regulated business (e.g. FSA), the Council will not deal with that firm. 3

4 The Council already restricts its Treasury Management activity to certain financial institutions in order to meet its own Treasury Management and Investment Strategies, which are approved by the Council annually. 5.2 Record-keeping procedures (Money Laundering Regulation 6): The Council will maintain procedures covering the retention of records. To ensure compliance, records are required to be kept for 5 years after the end of the transaction or relationship. 5.3 Internal reporting procedures (Money Laundering Regulation 7) The Council will maintain internal reporting procedures which document:- a). The nominated oficer who wil be the Money-Laundering Reporting Officer (MLRO) who will receive nominations under this regulation; that officer is the Council s Monitoring Oficer; b). Any other person in the organisation to whom information may arise which may result in them knowing or suspecting reasonable grounds for knowing or suspecting money laundering, fraud or use of the proceeds of crime; c). If the MLRO receives a disclosure they should consider, in the light of all information, whether it gives rise to such knowledge or suspicion; and d). If the MLRO determines that the information or matter should be disclosed they should do so to the National Criminal Intelligence Service (see 5. below). 5.4 Other procedures (Money Laundering Regulation 3(b)) The Council will establish other procedures of internal control and communication as may be appropriate for the purpose of forestalling and preventing money laundering:- Refunds Care will need to be taken especially with the procedures for refunds. For instance, a significant overpayment which results in a repayment will need to be properly investigated and authorised before payment. In the event of any suspicious transactions, the Council s Monitoring Oficer (i.e. the MLRO) will be contacted and the Audit Manager will investigate the case. The possible perpetrator should not be informed (i.e. nor tipped of ). 5.5 Training (Money Laundering Regulation 3(c)) The Council will take appropriate measures to ensure that relevant employees are: a). Made aware of the provisions of these regulations, Part 7 of the Proceeds of Crime Act 2002, Section 117 of the Anti-Terrorism, Crime and Security Act 2001 and Sections 18 and 21A or the Terrorism Act 2000 (these deal with the offences and are available from 4

5 b). Given training in how to recognise and deal with transactions which may be related to money laundering. c) The training will be given in-house over the course of the next three months. National Criminal Intelligence Service - In the event of an offence or a possible offence the MLRO (i.e. the Monitoring Officer) will contact: NCIS Law enforcement personnel initially through AAM/Internal Audit March