Urgent AML query

We are in the process of taking on a small charity. What, if any, AML checks are needed, for instance will checks on the charity's trustees be needed? I sincerely hope not, as the charity is up against afiling deadline of 31/8. Some quick responses would be gratefully received!

Comments
b.clarke's picture

Proceed with caution

b.clarke | | Permalink

Do not, under any circumstances, skimp on the AML checks. The fact that there is a close filing deadline is the charity's problem, not yours. In any case, why did the charity leave it so late?

A friend of mine does a lot of AML checks on charities and the trustees, and he finds that from time to time his checks show that his company should not get involved. You have to ask yourselves - would you want each of the trustees, individually, as your clients? You absolutely have to check on the trustees as well.

While it would be good to help a client in a time of need, your firm is undoubtedly worth more than the business that this one client can produce, so don't fail to approach this client with the same scepticism which you would apply in taking on any other client.

 

Agreed

192laura | | Permalink

I would absolutely agree with the above comment. I work for a company dealing in fraud prevention and AML, and we often hear of fraudsters using charities to test stolen credit cards, so they can then sell them on for a higher price as verified working cards. Unfortunately charities in some cases are seen to be an easy target.

The Law Society provides some guidance notes here, albeit aimed at the legal profession but still useful advice.

http://www.lawsociety.org.uk/productsandservices/practicenotes/aml/463.a...

"11.3.3 Charities

In common with trusts, while the majority of charities are used for legitimate reasons, they can be used as money laundering/terrorist financing vehicles.

If you are acting for a charity, consider its purpose and the organisations it is aligned with. If you are receiving money on the charity's behalf from an individual or a company donor, or a bequest from an estate, be alert to unusual circumstances including large sums of money.

There is growing concern about the use of charities for terrorist funding. "

Thanks...

RogerMT | | Permalink

....for the responses.

The reason the charity is up against its deadline is legitimate and unavoidable, but I won't go into it here. Suffice to say I will endeavour to do AML checks on the Trustees through Equifax, but as for the charity itself I would think the only way to arrive at a conclusion as to whether or not to act is a thorough examination of the books?

b.clarke's picture

No ...    1 thanks

b.clarke | | Permalink

RogerMT wrote:

.... as for the charity itself I would think the only way to arrive at a conclusion as to whether or not to act is a thorough examination of the books?

No. Apply the same procedure in principle as with a company. For example, is the charity properly registered at the Charities Commission? Do any pre-existing filings and accounts agree with what you have been told? Are existing filings up to date? Does anything about the situation feel not quite right?

OK...

RogerMT | | Permalink

...and thanks for the advice. Never prepared Charity accounts up to now, so will use same criteria in judging the charity as I would a company like you suggest. Must go now to research Charity Commission's website!

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