For those of you UK-based, HMRC has just issued its final guidelines for the MLR 2017, which applies to everyone who is a trust or company service provider (TCSP) under the Act, which came into force in June last year. This replaces the 2010 version.
The pdf of the guidelines can be obtained by going to: https://www.gov.uk/government/publications/anti-money-laundering-guidance-for-trust-or-company-service-providers
The main UK legislation covering anti-money laundering and counter-financing of terrorism is:
- Proceeds of Crime Act 2002
- Terrorism Act 2000
- The Money Laundering, Terrorist Financing and Transfer of Funds (information on the Payer) Regulations 2017
- Criminal Finances Act 2017 ● Terrorist Asset-Freezing etc. Act 2010
- Anti-terrorism, Crime and Security Act 2001
- Counter-terrorism Act 2008, Schedule 7
And information on sanctions can be found through:
- HMT Treasury Sanctions Notices, Guidance and News Releases
The guidelines point out that primary offences apply to everyone and you commit an offence if you know or suspect that property/assets is/are criminal property or proceeds. This does not just apply to terrorism.
It is an offence to fail to make a report about suspicious activity or to tip someone off that you have made or intend to make a report.
It is also a corporate offence to fail to prevent tax evasion.
To be clear, the definition of a TCSP says, ‘if you, by way of business, act as a company director/secretary, partner or trustee of an express trust or similar legal arrangement’.
If you fit this definition whilst working for your client (including being a ‘shadow’ director), you must register & comply with the Act to trade. You should not carry on business as a TCSP unless you are registered with HMRC, FCA, accountancy or legal professional bodies (e.g. The Law Society).
It is a requirement to undertake customer due diligence prior to starting the work (unless there are extenuating circumstances, in which case you have a 14 day period of grace), when:
- Establishing a business relationship with a customer
- Carrying out an ‘occasional’ transaction with a customer for €15.000 or more
- Money Laundering or terrorist financing is suspected.
The guidelines are very thorough and define processes to be undertaken, levels of due diligence required, the extent of record keeping and the route to making a report. There is a lot of related literature referred to in the guidelines which will cure any thoughts you had of having insomnia. However; it is the law and has international reach
It is crucial you consider your own position very carefully. It matters to your Institute as well as you – the point of bringing this to your attention is driven by our desire for the well-being of all our membership. A final point: you have signed up to the IIM’s Code of Conduct, which includes compliance with all relevant law. Please take the time to review your status under the Act.