Anti-money laundering
Amendments to practice note - December 2007
Introduction
This is a summary of changes made to the AML/CTF practice note in the 15 December 2007 version. This version reflects feedback received during the consultation period begun on 3 September 2007. The summary of changes highlights the main changes to assist firms in adapting their policies and procedures. It is not an exhaustive list of amendments nor a detailed explanatory guide to the reasons behind the various amendments.
Chapter 1
1.2
- New paragraph on guidance for firms conducting mainstream FSA work.
1.4.3
- Minor change to include information on the Proceeds of Crime Act 2002 (Business in the Regulated Sector and Supervisory Authorities) Order 2007.
Chapter 2
2.3.1
- Minor change to risk factors in acting for entities with complex ownership structures
2.4
- Minor change to bullet point on CDD controls if a retainer is high risk.
Chapter 3
3.8.4
- There is an additional bullet point on keeping records of suspicions and disclosures. This relates to a decision not to make a report to SOCA and a nominated officer justifying his position to law enforcement.
3.9.3
- Further advice was inserted on retaining evidence of training.
Chapter 4
4.3.1
- New paragraph on existing relationships pre-15 December 2007.
4.3.3
- Electronic Verification - a change on consent to electronic checks.
- Reliance and outsourcing - a change to emphasise that reliance is a risk in itself.
- Reliance in other countries
Minor changes to the supervision criteria for reliance on persons in other countries.
4.3.4
- The main change re-introduces previous advice on one-off transactions involving less than 15,000 euros.
- Ascertaining a client's legal position - a clarification of the exception to the duty to cease acting when you cannot complete CDD.
4.4
- Te xt added on the duty to keep clients' personal data updated under the Data Protection Act.
4.6.1
- T ext added on identification and verification in cases of face to face verification.
- Persons not resident in the UK - change to wording on dealing with foreign language documents.
4.6.2
- Text added on identification and verification for partnerships and unincorporated businesses.
- Private and unlisted companies in the UK
There are substantive changes to the section. The reference to obtaining copies of the company's entry in the FSA's online register has been deleted. - Public overseas companies
There are substan tive changes to the section. - Private and unlisted overseas companies
T here is a minor change concerning certification by professionals. - Pension funds
There is additional text on d ealing with pension funds.
4.7.6
- Non-Individual beneficiaries
There are minor changes to the bullet points.
4.8.2
- There is further explanation of the meaning of beneficial owners of pooled accounts.
4.9.2
- Senior management approval
There are small additions to the bullet points on who is senior management for the purposes of enhanced due diligence on PEPs.
4.10
- Factors that may trigger a need for CDD on existing clients now include an existing high risk client.
4.11
- There are new web links for the financial sanctions list in the section on FATF counter measures.
Chapter 5
5.3
- There are minor text changes to increase clarity in sections 5.3; 5.3.2; 5.3.3; 5.4.1; and 5.5.1.
5.4.3
- Sham litigation
There are changes to the text on when money laundering can occur.
Chapter 6
-
There are very slight text changes to increase clarity in sections 6.1; 6.2; 6.6.1; 6.6.2.
Chapter 7
- The only changes to the text were on forthcoming changes to the Terrorism Act arising from the TACT and POCA Amendment Regulations 2007. The substantive changes were undertaken in the February 2008 revision of the practice note.
Chapter 8
8.3.7
- This section has new information on the TACT and POCA Amendment Regulations 2007.
Chapter 9
9.2.2
- The Insolvency Practitioners Association was added to the list of supervisors.
9.4.1
- Amendments were made to the tip ping off penalties to reflect the changes that would come into effect with the TACT and POCA Amendment Regulations 2007.
Chapter 10
10.1
- Some text was deleted and simplified to advise solicitors to seek legal advice if they think they have acted as const ructive trustee.
10.2
- Changes to dealing with evidence of your intention to include any notes.
10.4.2
- The explanation of the Eurotrust case was deleted.
10.5.3
- Text about disclosures as evidence for civil claims has been deleted.
10.6
-
Minor change: 'You should consider notifying insurers whenever you make a disclosure to SOCA.'
Chapter 11
11.2.2
- Unusual retainers - two additional bullet points inserted.
11.2.3
- Establish a policy on handling cash
Deletion of advice on asking your bank to refuse to accept cash deposits. This has been replaced with:
'You may consider advising clients in such circumstances that they might encounter a delay in completion of the final transaction.'
11.2.4
- The new web link for HM Treasury's sanctions list was inserted.
11.3.1
- How the estate may include criminal property
Deletion of the paragraph on outstanding liability to the Department of Work and Pensions or HMRC.
11.3.4
- Changes to the use of the term receiver to deputy, following the enactment legislation in 2007.
11.5.3 - 11.5.4
- Extensive changes and new text added to this section on private equity.
Chapter 12
- Overall this chapter has very small changes.
12.3.2
- Disclosure obligations after completion
The words 'sale price' have been changed to 'sale consideration'. - Where criminal property is immaterial
There are minor linguistic changes in paragraphs 1, 2 and 3.