Tag: UK News

  • 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.

  • Money Laundering Supervison

    Steve O’Neill reviews the latest statement concerning Money Laundering Supervision

    The UK’s supervisory approach to compliance of obliged entities to the Money Laundering Regulations were branded “woefully inadequate” and are failing to block “corrupt money” and terrorist funds, an anti-corruption body has warned.

    This statement was made by Transparency International UK who went on to say billions of pounds of “dirty cash” is entering Britain every year. They state that this is partly due to a fragmented network of regulators means that only a very small amount is being investigated. (more…)

  • CCAB issues a reminder for practitioners to stay vigilant over money laundering

    Staying safe within the money laundering regulations

    With the latest budget heralding a clampdown on tax evasion, accountants in practice would do well to consider the first-aider’s rule when acting for clients.

    Ask any first aider about helping others and the first rule is: don’t put yourself in danger when trying to assist others. Think and check before jumping in the water to save the drowning man.

    An accounting service provider (practitioner) is subject to the money laundering regulations, which impose obligations of diligence and reporting on the member – where failure to comply can lead to criminal proceedings against the practitioner.

    Test the water before entering

    The first-aider would look at the water and assess his competency as a swimmer given the turbulent nature of the water. Are these choppy waters too great a risk? For the practitioner, this means that he has to consider his competence in the first instance by assessing the skills and experience he needs to deliver the service the client wants.

    Know who you are dealing with

    Although this may sound odd, the second thing the first-aider does is communicate and fact-find in order to assess the situation. This may have a bearing on how, or even if, the first-aider can assist.

    In money laundering terms this means knowing your potential client, and if it is an entity, then finding out who is behind it and who is taking the benefit from it. Making sure you have a record of that evidence is very important – and your only proof you have complied with the regulations.

    Watching for rocks and sharks

    The first-aider is ever alert to their surroundings and the changing circumstances to ensure they can react and adapt the rescue plan in order to manage the danger to them or the person they are trying to help.

    For the practitioner this means being alert for unusual events and transactions or results that implicate the client as perpetrator, facilitator or victim of a crime. The practitioner needs to ensure and evidence that all staff are trained in money laundering and that all suspicions are reported to the money laundering reporting officer (MLRO) who will make the decision whether to report to the National Crime Agency. Does the MLRO who receives no reports have poorly trained staff, rather than really safe clients?

    In addition, the initial client due diligence has to be refreshed each assignment and any changes to the evidence that is relied upon should be recorded. Where is the documentary support that this is still the most appropriate ongoing due diligence? A note confirming consistency with current file data each year should be made.

    Dialling 999

    The first-aider should dial 999 before entering the water but may not – and would assess the condition of the person in the water to see whether it was warranted.

    The reporting obligation imposed on the practitioner on the other hand is a bit more complex and onerous since it is a crime to fail to report. So when should the practitioner report? The regulations provide that the practitioner must report if, during the course of his business as an accounting services provider he becomes suspicious of there being a crime with proceeds.

    Professional scepticism should prevail. While he is not obliged to do anything extra as part of the money laundering regulations, he is required to be aware of the potential for money laundering or terrorist financing. That involves keeping an eye on the transactions during the course of the work and ensuring that they appear consistent with what he would expect to see, given the knowledge of the client.

    These transactions might, for example, involve the client’s staff stealing from the client, or some sort of tax evasion.

    Reports to the MLRO should be monitored and the decision whether to report documented. Where no report is made, this situation is monitored going forward in order to react, should further evidence come to light.

    A cry for help with a nasty twist

    Where the client comes to the practitioner to say “I’ve done wrong” (perhaps they have not  declared income which is in an undeclared overseas account), and “what do I do?” (seeking advice as to what to do under the law in order to regularise their affairs): does the practitioner help the client and still report them or does he apply the privilege reporting exemption?

    This is not the legal privilege we generally think of but a special privilege under the money laundering regulations. It is important to get legal advice confirming the position before taking the decision to report or not.

    If in doubt, seek advice from your professional body.

    In summary: you should:

    • know your client and their business;
    • appoint a MLRO and train your staff as to their obligations;
    • record and monitor evidence of the client’s identity;
    • monitor money laundering identity evidence and reporting to MLRO; and
    • record evidence of the MLRO decisions to report or not.

    To discuss your money laundering obligations, contact your professional body.

    You may also consider investing in a package of AML technical resources and/or attending further CPD on the subject.

  • 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.

  • United Kingdom and Isle of Man to sign enhanced tax information exchange agreement

    United Kingdom and Isle of Man to sign enhanced tax information exchange agreement

    The Government is to sign a tax information sharing agreement with the Isle of Man which will provide HM Revenue & Customs (HMRC) with a range of additional information about potentially taxable income in Manx bank accounts. This is part of a package of measures being developed by the UK and the Isle of Man as part of a shared commitment to combat tax evasion.

    Under the enhanced information exchange agreement, the UK and Isle of Man will automatically exchange a wide range of information on tax residents, on a reciprocal basis. To minimise burdens on financial institutions the agreement will follow, as closely as practicable, the UK-US Agreement to Improve International Tax Compliance and to Implement FATCA. The agreement will be concluded to the same timetable as the agreement currently being negotiated between the Isle of Man and the United States.

    Exchequer Secretary to the Treasury, David Gauke said:

    “This agreement will significantly boost the UK’s ability to tackle cross-border tax evasion. Automatic information exchange is an important tool in boosting HMRC’s ability to clamp down on those who seek to hide their money overseas. Our ground breaking agreement with the US sets a new standard in international tax transparency and today’s agreement between the UK and Isle of Man to move to much greater levels of automatic exchange is the next step in this process.

    “For years people said this couldn’t be done, so I welcome the progress we have made so far with the Isle of Man. We are looking to reach similar agreements with other jurisdictions and are in discussions with Jersey and Guernsey about enhanced information exchange as part of our common commitment to combat tax evasion.”

    Details of the necessary operational and implementation requirements are still being discussed and will be announced in due course.

    When combined with HMRC’s new centre of excellence in offshore evasion and the development of a comprehensive strategy to tackle it, HMRC will be well placed to clamp down even harder on those who evade tax by hiding their money offshore.

     

  • The Government published its changes to the Money Laundering Regulations 2007

    The Government today published its response to its consultation on changes to the Money Laundering Regulations 2007. Following this consultation the Government is now taking forward proposals to reduce the regulatory burden imposed by the current regulations, while strengthening the overall anti-money laundering regime.

    The aim of the changes was to make the UK’s money laundering regime more effective and proportionate, with the proposed changes saving firms around £3 million a year. Relevant regulatory changes will take effect from 1 October 2012.

    Criminal Offences
    The Government has decided to keep the criminal penalties in the Regulations. The consultation highlighted key risks inherent in their removal and there is insufficient evidence to indicate that removing them would achieve either the UK’s policy objectives or address the concerns raised. Indeed, the balance of responses indicates that ‘over-compliance’ behaviour is also influenced by other factors that would not be addressed by removing the penalties. For example, businesses may adopt risk-averse and tick-box approaches if it is more cost-effective for them to do so, in the absence of clear and unambiguous guidelines for front line staff, in order to prevent fraud or in order to comply with other legislation including financial sanctions.

    The Government reiterates the point made by the CPS that it is not in the public interest to prosecute employees of regulated businesses for minor, procedural or accidental regulatory failures.

    Reliance Purposes
    The Government is proceeding with the removal of the distinction between Part 1 and Part 2 bodies. Based on recent and continuing work with Supervisors, it is considered that they are discharging their role satisfactorily and that the proposed change is advisable. This was further confirmed in HM Treasury’s first Annual Report on Supervision1. As suggested in some responses, any new supervisors will be placed in Part 2 until they demonstrate ongoing, robust and effective supervision of their members.

    Small Business Exemptions from the Regulations.
    The Government does not propose to introduce an exemption based on the size or turnover of a business, as it acknowledges the absence of a positive correlation between the size of a business and the money laundering risk it represents. The Government also recognises the risk of the exemption leading to ‘smurfing’ and other criminal practices; and the practical difficulties of introducing such a measure.

    The Government understands the ongoing issues faced by some exceptionally small businesses in relation to the costs of compliance and supervision. Supervisors are encouraged to ensure that the risk-based approach translates into effective, differential treatment in terms of the burden of requirements and, where possible, the fee levied.

    Other Changes to be made include;
    Overseas estate agents are to be bought within the Regulations. The UK is required to regulate all estate agents in order to ensure they minimise their vulnerability to money laundering. These businesses should be regulated, both to ensure the UK is fully compliant with Financial Action Task Force (FATF) global standards and EU requirements and because these businesses are at high risk of money laundering.

    Fit & Proper Tests for MSB’s – The EU Directive allows for all criminal conduct to be taken into account. Given the high risk presented by Money Service Businesses (MSBs) and the case made for enabling the fit and proper test to take into consideration all previous criminal conduct, the Government will proceed with this proposal. The MSB sector is a high-risk sector for terrorism financing and money laundering.

    There are a number of issues that have been resolved concerning supervisors’ powers. The widest reaching change is that Government will proceed with the creation of an information-sharing gateway for supervisors. The Government acknowledges the need for safeguards and clarity around the circumstances under which the information can be shared and the nature of the information.

    Given the issue of overlapping responsibilities, the Government considers it essential that a new Supervisor is able to access information from a previous Supervisor when a business/person seeks to register for anti-money laundering purposes.

    A summary of the changes cited as the Money Laundering (Amendment) Regulations 2012 and come into force on 1st October 2012 are;

    • Partly or Wholly Removing Criminal Sanctions & Strengthening Supervisors Powers to Compensate – No Action
    • Removing Distinction Between Part 1 and Part 2 Bodies – Commencement Date 1 October 2012
    • Extending reliance to OFT-Supervised Debt Purchasers – Commencement Date 1 October 2012
    • Introduction of a De-Minimis Exclusion – No Action
    • Exemption of ‘Non-Lending Credit Institutions’ – Commencement Date 1 October 2012
    • Regulation of Estate Agents Handling Overseas Properties – Commencement Date 1 October 2012
    • Clarifying the Definition of Safe Custody Services – The Government response formalises the FSA definition as the one applicable in the UK. FSA to update its website and include in next edition of Financial Crime newsletter
    • Extending Consideration of Previous Criminal Conduct under HMRC Fit and Proper Test – Commencement Date 1 October 2012
    • Introducing Right of Appeal for HMRC Fit and Proper Test – Commencement Date 1 October 2012
    • Clarifying Supervisory Powers – Commencement Date 1 October 2012
    • Creating an Information Gateway for Supervisors – Commencement Date 1 October 2012
    • Regulating to Penalise Misused of HMRC name and logo by Regulated Businesses – HMRC to monitor this abuse and inform HMT if measures to mitigate it are not working.
    • Appointing the FSA as the Supervisor for Recognised Investment Exchanges – Commencement Date 1 October 2012
    • Removing Regulation 18 – Commencement Date 1 October 2012

    Other Changes to the Regulations which were a part of the proposals of the review and call to evidence which are deferred Subject to Revisions to the EU Third Money Laundering Directive expected early 2013

    • Improving Wording on Beneficial Ownership
    • Streamlining the Supervision of E-Money Issuers
    • Appointed Representatives
    • Pooled Client Accounts

  • 26.04.11 Thousands of UK passports ‘thrown out with rubbish’

    UK Passport
    UK Passport

    Some 10,000 passports a year are probably thrown in bins, says the UK’s Identity and Passport Service (IPS).  Launching a campaign urging people to keep passports safe, it warns the same number are lost in bars and clubs.

    The IPS said it had had reports of passports being stolen at gunpoint in Brazil, lost in jail, and left in the pocket of a coat donated to a tramp.

    The IPS based its findings on analysis of applications for replacement passports, which cost £77.50.

    Men replace more than 162,500 lost and stolen passports a year compared with about 112,000 by women, the IPS says. Of all the lost and stolen passports in the UK, people in their 20s were responsible for 42.8% of the total – more than twice as many as the next nearest age group. 

    Lost and stolen by age

    • Teenagers – 6.3%
    • 20s – 42.8%
    • 30s – 20.8%
    • 40s – 12.8%
    • 50s – 10.2%
    • 60s – 5.3%
    • 70s – 1.6%
    • 80s – 0.2%

    Those in their 30s lost 20.8% followed by people in their 40s, who lost 12.8%.

    IPS chief executive Sarah Rapson warned that passports were becoming increasingly attractive to criminal gangs wanting to steal identities.

    She said: “It’s really important that you keep it safe both when you are at home and when you’re abroad. “Remember to put your passport away after use. Don’t leave it in a trouser or shirt pocket in the laundry pile.”

    Some of the colourful reasons given for why people were parted from their passports include:

    • Taxi attacked by gunman on way to airport in Brazil
    • Fell out of bag while snowboarding
    • Drunk boyfriend (now ex) destroyed it
    • Last seen in pocket of a coat donated to tramp
    • Wallet stolen at children’s party with passport inside
    • Passports stored in safe in Turkish villa, thieves stole safe
    • Put in bin by infant daughter; and
    • Put on a fire with clothes

    The service advised people to keep their passport in a place they can remember and to only carry it when absolutely necessary.

    It said people should use alternatives if they needed to prove their age and should keep a note of the number to help speed up the issuing of replacements.

  • 10.08.10 External consultants cannot act as a Nominated Officer under Money Laundering Regulations

    As an external consultant I am usually in the situation where systems we devise for compliance starts with a simple policy statement, which firstly details who is and how to communicate with, the nominated officer, who will be a senior member of the firm, a director, partner or owner manager.  We remind firms of their responsibilities under the Money Laundering Regulations, It is after all their business and they must accept reasonability for its successful running.

    It does come as no surprise, therefore, that the Financial Services Authority (FSA) has recently censured and banned three directors from acting as senior managers for failing to meet their supervisory standards. The FSA investigation found that the directors had been relying too heavily on external consultants for advice on how to run their business.

    It is equally unsurprising then that HM Revenue & Customs (HMRC) have also announced that they take the same view to the FSA in relation to businesses meeting their obligations under the Money Laundering Regulations.

    HMRC also state that they have no objections to businesses getting advice from external consultants regarding their obligations under the Regulations, as long as the responsibility for complying with the Regulations remains on the business rather than any consultant.

    What does come as a surprise is that some consultants, who should frankly understand the Regulations better, have recently offered their services to act as the Nominated Officer for a business. HMRC has no formally announced that it does not consider that a consultant outside the business can be appointed Nominated Officer for any of the businesses HMRC supervise under the Regulations.

  • 08.04.10 Crime proceeds spent on Wigan allotment project

    Thousands of pounds confiscated from criminals have been donated to an allotment project in Greater Manchester.

    Norley Hall allotments in Wigan has been given £5,000, which was raised through the police’s payback scheme.
    Under the scheme, money raised by criminals is given to the community.

    The allotment was set up to encourage youngsters who had been involved in anti-social and criminal behaviour to give something back to their community.

    The young people will use the area to grow flowers and plants which will be given to local victims of crime, police said.
    Insp Phil James, of Greater Manchester Police, said the scheme, which is in its first year, had led to a reduction in anti-social behaviour and criminal damage in the area.

  • 22.01.10 Fraud losses cost the UK £30bn a year

    Fraud

    Fraud – including scams, online theft, insurance cheats and tax fraud – costs the UK £30bn a year, according to an official estimate.

    The National Fraud Authority (NFA) has calculated the figure for the first time and said it equated to £621 per adult in the UK. Some 58% of fraud was in the public sector, at a cost of £17bn, it added.

    It said the losses were paid for through taxes and rising prices of products and services.  The highest sector was losses from tax fraud – estimated at £15.2bn – although this was only 3% of tax liabilities, the NFA said.

    According to the NFA, which is part of the UK Attorney General’s Office, some 31% of losses came in the private sector, with the financial services sector suffering the biggest hit.

    It lost an estimated £3.8bn, including £1bn in mortgage fraud. This has prompted the City watchdog, the Financial Services Authority, to take a tougher stance against the crime, with a number of brokers having been fined and banned from the industry.

    Another £2bn was lost to insurance fraud, and the remainder came from fraudsters targeting online banking, cheques, and plastic cards.

    The consumer goods industry lost an estimated £1.3bn a year. Manufacturing suffered losses of £1bn a year, and technology, media and telecommunications lost £948m.

    Consumers have also been tricked out of an estimated £3.5bn a year in share, lottery and loan scams. Some 12% of all fraud was suffered by individual consumers.

    “Although the figure appears on the face of it far greater than the previous estimate, we know this is because we have included many additional figures that other studies have not,” said NFA chief executive Bernard Herdan.

    “With this vital information we can develop clearer priorities to prevent, detect and deter fraudsters. We will use the data to help identify those areas of fraud that cause the most harm to the UK economy”.

    Visit the BTC website for compliance help and support for firms in the regulated sector