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AML Compliance Questions

What level of risk is acceptable to comply with anti-money-laundering regulations?

When doing due diligence checks for the anti-money-laundering regs, I understand quantifying the risk is a judgement, but once we have quantified it, what level of risk is acceptable from a legal point of view? I assume we are not free to decide that a 90% risk is acceptable.

If the client is identified as high risk, do you simply then need to do additional checks on their ID and run the standard enhanced due diligence checks (electoral register, HMT sanctions, PEP register etc)? And if they pass all that, you can take them on?

Apparently, you need to do enhanced due diligence (extra ID checks) on a client if they are a PEP. Surely checking them on the PEP register is part of enhanced due diligence, so how would you know unless you were already doing the enhanced due diligence?

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18th Nov 2017 16:19

I have a simple way of dealing if they require any additional checks I don't take them on.Too much hassle for me and I consider such people are better served by big firms. I would think that you would know a PEP because by definition they are prominent people in public life.

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18th Nov 2017 18:06

You might not know someone who's connected to a PEP though.

As an aside, this AML can be quite worrying. I had an email from FBI Agent Garry Walker today telling me that a warrant had been issued for my arrest. However, not to worry, all I need to do to resolve this is send US$175 to some bloke in Benin.

What a relief !!

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By chatman
to lionofludesch
18th Nov 2017 18:21

Reminds me of a news story I heard recently about police raiding the flat of a Nigerian prince and finding $10bn in there. Apparently, he had been trying to give it away but no-one had answered his emails.

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19th Nov 2017 09:21

You can choose to take on a client whatever level of money laundering risk you judge to be present (but you can also choose not to take on any client).
Equally you can retain (or choose not to) any client if your judgement of the money laundering risk they present changes.
But if you consider a client is high risk (or is a PEP) then you will need to be more sure that you have their correct ID, that you have identified any beneficial owners, that you are alive to anything which ought to lead you to suspect money laundering, that you appropriately report any suspicions that you have, and that you do not yourself commit any money laundering in connection with the client.
David

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By chatman
19th Nov 2017 09:36

Thanks David; that is very helpful. Would accepting fees from a client who had, for example, failed to declare some cash takings, be a money-laundering offence?

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to chatman
19th Nov 2017 09:49

No, accepting genuine fees for work done would not be a money laundering offence by the accountant (see s329(2)(c) PoCA 2002).
But if you suspect the client of a money laundering offence then you will be obliged to report that suspicion (unless an exemption applies, such as 'poca privilege').
David

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By chatman
to davidwinch
19th Nov 2017 09:53

Thanks David.

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