The Money Laundering Regulations and Proceeds of Crime Act 2002 also places additional responsibility on a ‘nominated person’ for external reporting to the Serious Organised Crime Agency (SOCA) and be the contact for Law Enforcement within the firm.
All regulated firms are required to appoint a Nominated Officer and a Money Laundering Reporting Officer (MLRO), in reality in most small and medium sized firms this role is combined and is the same person. A sole trader by default will be that person. This person, by the very nature of the duties, should also be a person with a high level of responsibility within the firm. For continuity and holiday cover it is quite usual to have a deputy MLRO.
In reality it is usually the MLRO who is also given the responsibility of documenting, implementing and monitoring the firms’ policies and procedures for compliance with the Money Laundering Regulations and identifying the risks to firm.
So in the vast majority of firms this single person will be responsible for compliance management, that is; managing the risks, designing, implementing and monitoring policies and procedures, be the face of the firm to law enforcement and the monitoring body, be the risk manager and protector of the firm and its reputation.
The MLRO is the ‘risk manager’ and as such must use his knowledge and skills to identify, quantify and manage the risk on behalf of the regulated firm. You must remember that the MLRO carries the greatest risk of non compliance by the firm and staff, so is therefore the one to take responsibility when there is a risk of committing an offence under Regulation 45 ML Regulations 2007, placing him personally in the spot light of the authorities.
Section 3: Self assessment. You should know what the primary and secondary legislation of the UK is.
- Do you know what the primary legislation is and which further legislation it is supported by?
- Do you know what the UL’s secondary legislation is and what legislation it implements into UK law?
- Do you understand the role of the Nominated Officer (MLRO) within your firm?