Sat-Nav and the Money Laundering Regulations

My wife hates Sat-Nav! But I think she does not see all the benefits of it. She thinks that it is just a way of finding the best route from here to there.

“You can look at a map,” she says, “and anyway you know the way – you’ve been there before.”

But I think Sat-Nav is a lot more than just a route finder. That got me thinking about how much Sat-Nav has in common with the Money Laundering Regulations!

Most people think of the MLR in terms of getting documentary evidence of the identity of a new client. That’s just how my wife thinks about finding a route – something to be done, if you have to, before you set off.

But for me Sat-Nav gives me all sorts of useful information – like when I can expect to arrive at my destination, how many miles there are to go, what compass direction I am heading, what speed I am travelling and, of course, which way to turn at the next junction and how far away that is. Some of that information I could get in other ways – the speed from my speedometer, the compass direction from the position of the sun. But crucially the Sat-Nav is directly relevant to the situation I am in when I consult it, it is up to date and ongoing, and it responds to any detours I take along the way.

What are the parallels to the MLR?

Well money laundering compliance is not just something to think about when you accept a new client. It is something to keep in mind throughout your relationship with the client. Client due diligence, or CDD, is not confined to confirming the client’s identity. It has more to do with understanding the client’s business, how it is controlled, who owns it and what the accountant is being asked to do for it. Of course some of this information, like the information from the Sat-Nav, can, and does, come from other sources and is collected for the general purposes of performing the best and most appropriate work for the client.

As part of your compliance with the MLR you will undertake an initial money laundering risk assessment when you accept a new client. But that judgement of money laundering risk is not intended to be a once in a lifetime affair. That initial assessment will help you decide how to complete your initial verification of the identity of the client, and how you ascertain the identity of any beneficial owners of the client.

But the real significance of money laundering compliance is in your continuing awareness of the possibility of crime of some sort which may have generated a benefit, and your need to report any such suspicions to your firm’s MLRO or to SOCA. It is that awareness, throughout your relationship with the client, which lies at the heart of the MLR. Thinking about MLR compliance only in terms of initial ID rather misses the point!

David Winch

Comments

Big Brother

Anonymous | | Permalink

Sat nav also allows the state to monitor your whereabouts, the speed and distance travelled and presumably later on send you a bill or to prison.
We may as well all be tagged !
May be its time to stop being reactionary and accept that we have no privacy or rights in this country any more ! Unless of course you are a proper criminal.
If we were recognised as criminals could we receive payment for our super grass services instead of it being provided free at great cost.

How does that work then?

aa-ltd | | Permalink

Satellite navigation units receive timecode signals beamed down from multiple satellites which enable the units to mathematically determine their location. Not sure how this information finds its way back to the authorities though. Perhaps you could explain this?

Now, your mobile phone is another story altogether...

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Group: Money laundering and crime
A group for discussing issues relating to suspected money laundering and other crime