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How should I check the source of funds from third parties?
Where can I find reference to checking source of funds from third parties in the Anti-money laundering guidance for the legal sector?
Chapter 12 of the Anti-money laundering guidance for the legal sector deals with money laundering warning signs and includes funds from a third party at section 12.4.2.
In certain circumstances, you may be asked to receive funds directly from third parties.
You’ll need to decide whether, and to what extent, you need to undertake any customer due diligence (CDD) measures in relation to the third parties to monitor whether the funds received are from legitimate sources.
Regulation 28(11) requires that you conduct ongoing monitoring of a business relationship. Ongoing monitoring includes:
"scrutiny of transactions undertaken throughout the course of the relationship, (including where necessary, the source of funds) to ensure that the transactions are consistent with the relevant person’s knowledge of the customer, customer’s business and risk profile"
For more information, see Chapter 12 of the Anti-money laundering guidance for the legal sector.
While every effort has been made to ensure the accuracy of the information in this article, it does not constitute legal advice and cannot be relied upon as such. The Law Society does not accept any responsibility for liabilities arising as a result of reliance upon the information given.
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