Tag: Money Laundering Regulations

  • Our SmartSearch Services will help you verify your clients as an ACSP

    Our SmartSearch Services will help you verify your clients as an ACSP

    So if we already have a copy of a photographic document, we can just upload it into SmartSearch’s IDVT technology and verify the document, this is without forcing the client to go through the GOV.UK one login for full facial recognition.

    SmartSearch’s SmartDoc with or without facial recognition or expert opinion, uses IDVT technology, they are a level three on the IDVT scale, two being the minimum requirement. So these comply with the Companies House Option 1 standard.

    For new clients we still have to comply with the Money Laundering Regulations as well as the Companies House standard, the SmartSearch checks can satisfy both requirements in one singular search.

    How IDVT it works

    • The SmartSearch software combines machine-learning interrogation and an OCR algorithmic check on the ID document’s Machine Readable Zone (MRZ) to verify whether the document is genuine and unaltered, with a full data integration to identify document tampering.
    • Photographic ID such as a E-passport or DL, ID Card,
    • You will need the clients full name,
    • Any former names (as per Government Document),
    • Full Date of Birth,
    • Current Residential Address.
    • Also Details of previous address if less than 12 months at current.

    The Smart Search software will verify the Cryptographic features of identity documentation and security features that correctly identify the person or organisation that issued the documentation. The SmartSearch checks also include the PEP, Sanctions and adverse information checks with ongoing monitoring therefore satisfying both the Companies House standard and anti-money laundering requirements in the one search.

    We offer a non-contractual service where you are invoiced on your actual usage and invoice to your account once a month. Contact us for a complete service price list.

  • Economic Crime Act Part 2

    The reform of Companies House under the Economic Crime Act Part 2 represents a significant step towards enhancing transparency, accountability, and the fight against economic crime in the United Kingdom. Companies House, the registrar of companies in the UK, plays a vital role in maintaining accurate and up-to-date information about businesses operating within the country. However, over the years, concerns have been raised about the misuse of this information for illicit purposes, such as money laundering, fraud, and the facilitation of illegal activities.

    The Economic Crime Act Part 2 aims to address these concerns by introducing a series Economic of reforms to strengthen the integrity of Companies House and improve its ability to combat economic crime. Some of the key provisions of the Act include:

    1. Identity verification: The Act introduces measures to enhance the verification of the identity of individuals who own or control companies. This includes requiring individuals with significant control (PSCs) over companies to provide more detailed and accurate information about their identity, such as their nationality and residential address. This will help to prevent the use of anonymous or false identities for illicit purposes.

    2. Information sharing: The Act enables better information sharing between Companies House and law enforcement agencies, such as the National Crime Agency (NCA) and the Financial Conduct Authority (FCA). This will facilitate the identification and investigation of suspicious activities, allowing for more effective enforcement of laws related to economic crime.

    3. Increased powers and resources: The Act grants Companies House additional powers and resources to carry out its functions more effectively. This includes the ability to query and investigate information submitted by companies, as well as the power to impose fines and penalties for non-compliance or the provision of false information.

    4. Beneficial ownership register: The Act mandates the establishment of a central register of beneficial ownership information, which will be accessible to law enforcement agencies and certain other entities. This register will provide a comprehensive and transparent record of individuals who ultimately own or control companies, helping to prevent the misuse of corporate structures for illicit purposes.

    5. Enhanced criminal offenses: The Act introduces new criminal offenses related to false information provided to Companies House, including the creation or alteration of company records with the intent to deceive. These offenses carry severe penalties, including imprisonment and fines, to deter individuals from engaging in fraudulent activities.

    The reform of Companies House under the Economic Crime Act Part 2 is a significant step towards strengthening the UK’s anti-money laundering and anti-fraud framework. By introducing measures to enhance transparency, verify identities, and improve information sharing, the Act aims to create a more robust system that can effectively detect and prevent economic crimes. These reforms not only protect the integrity of the UK’s business environment but also contribute to the global effort in combatting illicit financial activities.

  • Smart Search platform upgrade

    Important Service Update 

    We are required to inform you of this service upgrade. 

    The Smart Search platform upgrade is coming soon!

    In response to feedback, and as part of their commitment to continuous improvement, SmartSearch is pleased to announce that we will shortly be upgrading your platform.

    Built using the latest technology, the upgraded platform will ensure SmartSearch will remain at the forefront of the industry with exciting new features, whilst keeping the core functionality the same. 

    Benefits 

    • A new modern and seamless look 
    • New features to improve usability 
    • Improved service and performance levels 
    • Built on the latest technology, to enable a continuously evolving solution

    When will this change take place?

    The migration window will commence from late July.

    What about my data?

    Your data will continue to be the number one priority and is hosted exclusively in the UK, with all security controls being maintained during the migration process and beyond.

  • Policies and Procedures AML Regulations 2017

    Policies and Procedures Templates for the Money Laundering Regulations 2017

    A complete set of templates which aids in the requirements in the Regulations for risk sensitive policies, controls and procedures which are able to demonstrate to a supervisor your firm’s specific policies, controls & procedures for AML. It includes:

    • Templates covering The firms’ Policy Statement,
    • Templates for the ‘Risk Register’ that is Risk Assessment & Risk Management controls and Procedures
    • Templates for Policy and management procedures for reporting both internally and to SOCA
    • A further ‘Tool Kit’ section packed with working papers and other relevant items to help you prepare your firms specific policies, controls and procedures.

    The documents are delivered electronically allowing for simple editing in word along with explanations and instructions of what is expected of you for each section.

    For further details click here

  • EU’s Fourth Anti-Money Laundering Directive

    This is the first of a number of posts, looking at the implications EU’s Fourth Anti-Money Laundering Directive on the UK’s Regulated Sector

    Obliged Entities

    This is the logical place to start for a business within the scope of the Regulated Sector of the UK Money Laundering Regime, ‘Obliged Entities’ is a new term being used to describe you, whether you are natural person, (that is an individual) or operate within a partnership or a company structure or any other type of legal person including trusts.  This term ‘obliged entities’ is introduced to describe those businesses to whom the directive applies. (more…)

  • The EU Fourth Money Laundering Directive adopted in June 2015

    The EU Fourth Money Laundering Directive (4MLD) was adopted in June 2015.

    One of the main requirements which are an enhancement over the 3rd directive is that it requires all Member States to hold central registers on company beneficial ownership information from 2017. The UK has been ahead of other Member States in creating its own central register. The directive draws heavily on the UK model although there are some minor differences between the two regimes. (more…)

  • European Parliament to Vote on the 4th Anti-Money Laundering Directive

    European Parliament to Vote on the 4th Anti-Money Laundering Directive

     

    The European Parliament on the 13th February will vote for legislative revisions to the current EU Anti-Money Laundering Directive (AMLD). This is a once-in-a-decade opportunity, the 3rd directive was voted on 17 December 2005. The proposed revised Anti-Money Laundering Directive should have a tremendous impact on the battles against corruption, drug trafficking, tax evasion and a range of other criminal activities all currently facilitated by the ease in which money can still be laundered across Europe today.

    The draft EU AMLD would, in part, require all companies registered in the EU to hold details of who really owns and controls them – their beneficial owners. This might not sound like much but consider this: in Europe less personal information is asked of a company opening a bank account than there is of an individual applying for a driver’s license, to rent a property or to simply obtain a library card.

    As a result, many companies are opened in names not associated with that of the person who really owns or controls them. And once a bank account has been opened in a false name, if illegal activity is suspected it is almost impossible to follow the money laundering criminal money trail back to the true beneficial owner.

    UK Companies Trust and Transparency

    Various reports and analysis of the UK’s system of Companies House receiving all information in good faith, by-passing the Money Laundering Regulations, have confirmed that the trust and transparency of company structures needs to be radically overhauled.

    As such a consultation document for changes to the way companies and Companies House had been released by the UK Government with many proposals concerning the Trust and Transparency of UK Companies. The changes from this consultation will mean bringing amendments to the Companies Act 2006.

    A public register would have made it more difficult for organised crime groups to use UK and other shell companies to launder huge sums of money. Over the last decades, many organised crime groups used UK companies to launder funds whilst many EU and UK citizens have simply used them as part of aggressive tax avoidance or even evasion schemes.

    Last year, the European Commission hired accounting firm Deloitte to look into the effectiveness of the current AMLD. They found that it did not do enough to combat international or even pan-European money laundering schemes.
    One of the short-comings high-lighted in the study was the difficulty in identifying beneficial owners. Not only can the due-diligence be a costly and time-consuming undertaking, but without substantial prohibitive measures in place, the incentive for obliged entities to chase down information about clients is sometimes missing.

    UK To Set Up Public Registers

    The UK has already announced that it will go a step further than other European countries and set up a registry of the beneficial owners of companies. This register will be publicly accessible.

    By sharing company ownership with all interested parties – including banks, law enforcement, journalists, citizens and obliged entities – The UK can ensure that adequate oversight is guaranteed and information is made available to those who need it. Obliged entities will be able to complete customer due diligence, law enforcement will be able to attach names to proceeds from crime, journalists can research political contributions or other questionable or even illegal donations (and many other stories of corruption) and average citizens or small businesses could, for example, know and understand who is behind their partners, suppliers or customers.

    Providing beneficial ownership information to the public registry does not require much from the companies beyond sharing information they should already possess, such as the company beneficial owner’s full name, date of birth, the means of exercising control over the company, contact details and information detailing the legal shareholders.

    SmartSearch Electronic Verification Reporting

    At BTC Corporate and Compliance we offer SmartSearch for AML Verification to our obliged entity customers for their CDD purposes. The SmartSearch platform does both individual and corporate AML compliance reporting. The business reports already highlight beneficial owners within the report and are of the standard of the 4th Directive. Over 1,100 sanctions and warning lists are used by integrating the Dow Jones watch list into all searches and allowing the user to drill down and see the information returned for any negative matches.
    We offer these searches on a non-contractual pay as you go basis.

  • Money Laundering Transparency & Trust discussion paper

    HM-TreasuryOn 15 July, Dr Vince Cable, Secretary of State for Business, Innovation and Skills, announced the launch of the Transparency & Trust discussion paper. This sets out a number of proposals aimed at addressing opaque ownership structures and improving the accountability of company directors, to comply with the Money Laundering Regulations.

    The proposed reforms seek to promote growth by improving confidence in the UK as an open and trusted place to invest and do business. Greater transparency and improved trust will mean honest entrepreneurs and investors are more willing to do business in the UK and are not disadvantaged by those who don’t play by the rules.

    Business success, and therefore economic growth, depends on investors, employees, consumers and the wider public having confidence in business. When companies do business with each other, those transactions must also be built on trust.
    An effective and trusted system that identifies and deals with poor business behavior reassures people that we operate fairly, and encourages honest entrepreneurs to invest in activities promoting growth and employment.

    This paper considers a range of proposals to enhance the transparency of UK company ownership and increase trust in UK business, by linking closing with the new Money Laundering Regulations. This will help:

    • prevent illegal activity
    • better enable companies to be held to account
    • provide businesses, investors, employees and consumers with confidence that companies are acting fairly

    The extensive range of proposals to aid money laundering compliance includes;

    • A central registry of beneficial ownership information  to be held at Companies House
    • Extension of Part 22 of the Companies Act extended to all companies, not just PLC’s
    • Validation checks for submissions of beneficial ownership information
    • Proposals to update beneficial ownership as it changes bringing into question the future of the annual return.
    • Making information more publicly available
    • Extending the investigative powers of the 1985 Act to other law enforcement agencies.
    • The abolition of bearer shares.

    Changes will be made to the Companies Act and will be introduced alongside the 4th Money Laundering directive, from which many of the proposals are taken. This joint legislative change will take place 2014/2015.

  • FATF Release new guidance

    The Financial Action Task Force, the global standard-setter in the fight against money laundering and terrorist financing, has revised the Recommendations after more than two years of efforts by member countries. The Recommendations are used by more than 180 governments to combat these crimes. The revisions, made with inputs from governments, the private sector, and civil society, provide authorities with a stronger framework to act against criminals and address new threats to the international financial system.

    The cost of money laundering and underlying serious crime is very large, estimated between 2 and 5% of global GDP. The revision will enable national authorities to take more effective action against money laundering and terrorist financing at all levels – from the identification of bank customers opening an account through to investigation, prosecution and forfeiture of assets. At the global level, the FATF will also monitor and take action to promote implementation of the standards.

    The revised FATF Recommendations now fully integrate counter-terrorist financing measures with anti-money laundering controls, introduce new measures to counter the financing of the proliferation of weapons of mass destruction, and they will better address the laundering of the proceeds of corruption and tax crimes. They also strengthen the requirements for higher risk situations and allow countries to take a more targeted risk-based approach.

    Giancarlo Del Bufalo, the President of the FATF, said:

    “Adoption of the revised Recommendations demonstrates countries’ shared commitment to fight money laundering, terrorist financing and the financing of the proliferation of weapons of mass destruction.”

    “The revised Recommendations include requirements for stronger safeguards in the financial sector, strengthened law enforcement tools and improved international cooperation.”

    The main changes are:

    Combating the financing of the proliferation of weapons of mass destruction through the consistent implementation of targeted financial sanctions when these are called for by the UN Security Council.

    Improved transparency to make it harder for criminals and terrorists to conceal their identities or hide their assets behind legal persons and arrangements.

    Stronger requirements when dealing with politically exposed persons (PEPs).

    Expanding the scope of money laundering predicate offences by including tax crimes.

    An enhanced risk-based approach which enables countries and the private sector to apply their resources more efficiently by focusing on higher risk areas.

    More effective international cooperation including exchange of information between relevant authorities, conduct of joint investigations, and tracing, freezing and confiscation of illegal assets.

    Better operational tools and a wider range of techniques and powers, both for the financial intelligence units, and for law enforcement to investigate and prosecute money laundering and terrorist financing.

    For more information on the FATF Recommendations, please visit the publication page on www.fatf-gafi.org/recommendations

  • 07.06.11 HM Treasury Publish MLR Review

    HM Treasury published its response to the review of the Money Laundering Regulations 2007. It is a consultation document requiring responses to be submitted by 30August 2011.

    It separates itself from the obvious areas from which FATF will review their 40 recommendations such as PEP’s and expansion of the regime. These changes will result in the 4th Directive; however with a proposed implementation date of 1 April 2012 we could be in for two sets of new regulations in a short space of time.

    After going through the document there is lots of discussions. However the main ones are

    • Removal of criminal sanctions
    • Increase supervisor powers to mitigate the risk of the removal of the above
    • Reliance to be extended to all professional bodies in Schedule 3
    • De-minimus exclusion to small businesses of euro 15,000 or below annual turnover
    • UK estate agents selling offshore property to be bought into the Regulations, though not letting agents
    • Powers for all supervisors to impose penalties when not allowed to enter business premises
    • Powers to impose penalties for unreasonable behaviour to provide information
    • Supervisor powers to enforce payment of fees and powers of de-registration
    • More freedom for the exchange of information for supervisors.

    There are a lot of general discussions surrounding policies and procedures and general guidance coupled with the risk based approach and the various sectors. Generally it is perceived that it is not so much as “on the shelf” guidance that does any good but those that promote active participation, the ‘toolkits’, that works. In 7.11 on this subject, I think I can take some pride here, since I believe they may be talking about the one I wrote for one of the supervisors and which is possibly going to adopted by two more.

    In reality the document is a reinforcement of the risk based approach, almost a plea to work in that less rigid way, the end of the tick box approach whilst working without fear of prosecution if we should not always get it right. An approach that can only be undertaken if law enforcement, our supervisors and the regulated businesses themselves work towards the same outcome together. If achieved, it should increase compliance at a reduced cost.