All public sector organisations, whether large, small, governmental or not-for-profit, need to understand the risks of financial crime. There are several ways in which your organisation can be affected by financial crime:
- your organisation may be a victim of financial crime
- your organisation may be targeted by criminals to facilitate financial crime
- your organisation may become involved in an offence as a result of conduct by your staff or management team
As in-house legal counsel, your role is to protect and defend your business, and help it to survive a crisis if it is targeted by, or investigated for, financial crime. The Law Society provides a wide range of tools and information to support you.
Key risk areas
Fraud
Fraud is one of the most well known types of financial crime. Public sector and not-for-profit organisations may find themselves encountering crimes such as benefit fraud, tax fraud and charity fraud.
If you know or suspect that your organisation has been a victim of fraud or that a fraud is occurring, you should follow your organisation's internal reporting procedures. You may also find it useful to contact Action Fraud on 0300 123 2040 or report it online. Action Fraud is run by the National Fraud Authority and is the UK's national fraud reporting centre.
Bribery
The Bribery Act 2010 applies to public sector organisations as well as commercial entities. Bribery is therefore a risk area for organisations of all shapes and sizes. Further information about the provisions of the anti-bribery legislation and how you can comply with it can be found at:
Sanctions
If your organisation provides benefits or other financial assistance, it is increasingly likely that you will come into contact with the international sanctions regime; you should therefore think about who your organisation interacts with and understand how sanctions could apply to them. Chapter 4.11 of the AML practice note provides further information about sanctions.
Money laundering and terrorist financing
All organisations must comply with anti-money laundering and counter-terrorist financing (AML/CTF) legislation. If you do not and your organisation becomes involved in money-laundering or terrorist financing, you risk:
- criminal penalties
- civil claims
- regulatory action
- reputational damage
Most public sector organisations will not be in the regulated sector and therefore will not be subject to the Money Laundering Regulations 2007 (the regulations) However, if your organisation provides legal advice by way of business to external parties or companies, the regulations will apply to you in the same way that they apply to law firms. If this is the case, the Law Society's anti-money laundering practice note and anti-money laundering training will assist you with compliance.
Even if you do not operate within the regulated sector, all organisations and individuals can still commit the principal money laundering offences under the Proceeds of Crime Act 2002 and the terrorist financing offences under the Terrorism Act 2000.
The Law Society's practice note and regular articles may assist your organisation to spot warning signs of money laundering and emerging risk areas. We also provide useful information on how to report concerns to law enforcement and links to other sector-specific AML/CTF guidance.
Further information
Further advice and articles can be found on the money laundering and financial crime page of the Law Society website.
Further information about training opportunities
Articles
External links