Money laundering: You cannot be serious

money laundering
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There have been recent murmurings in the media and from the authorities about the ineffectiveness of British businesses when it comes to identifying and helping to stamp out money laundering activity.

It might seem naïve but while the vast majority of organisations would be horrified at the suggestion that they had aided and abetted criminals to launder money, they may be doing so almost unwittingly.

One would like to think that this could never apply to any firm of accountants in the country, not to mention each and every bank, art dealer and estate agent. The odd cynic amongst us might raise an eyebrow at organisations in some of these industries but eventually accept the point.

On that basis, the issue that we may need to address is not the danger that we or colleagues are willfully attempting to assist fraudulent activity. It is a much simpler but potentially almost equally damaging malaise, that of turning a blind eye or mere laziness.

If somebody comes to you offering the opportunity for lucrative business, the initial reaction must surely be to do whatever it takes to haul it in. That could include prioritising their work over projects for existing clients, reducing prices and generally accommodating the new client in any way that seems even vaguely reasonable.

Fair enough, most of us would look askance if a new client turned up with a suitcase full of £50 notes, however good the explanation for this old-fashioned method of payment.

We would also run through the standard money laundering questionnaires and, should any alarm bells ring loudly enough, refer the matter to the MLRO or his/her departmental/office representative.

The question comes about what action we would take in a less drastic situation. Without wishing in any way to cast aspersions on the conduct and practice of the average firm, this writer fears that in many cases, some of us might be tempted to take the easy way out and assume that all was well without doing as much due diligence as the law and our own internal manuals require.

In nine cases out of 10 and quite probably 99 cases out of 100, quietly turning a blind eye to procedural issues will have no adverse consequences. After all, the vast majority of those coming to accountants and requiring their services are basically legal, decent, honest and truthful citizens.

What we all need to bear in mind is the fact that if the odds above are correct and we take on board 100 new clients, one of them will be a scoundrel.

The serious consideration is that if we do not identify that individual and make the necessary report to the authorities then not only are we potentially helping someone to further their criminal activities but, far worse, we might be regarded as complicit and could very deservedly suffer serious consequences.

Most of the time, this might lead to no more than a lot of wasted time and a quiet rap across the knuckles. However, for those whose luck runs out, there could be adverse publicity in the professional press, the loss of a practising certificate or even professional qualification and, in extremis, an opportunity to join our client in prison.

If that doesn’t scare you, congratulations, your firm may be in the minority (?) that is doing everything by the book.

About Philip Fisher


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09th Nov 2018 13:27

I start taking money laundering more seriously when bank directors get jailed for eye watering amounts laundered through their banks.

HSBC, Dankse and just recently another major bank (Forgot the name, so shell shocked by the number of banks I forget which ones as they all seem to be involved). We are talking £billions.

Then rigging rates. You name any financial crime and banks and financial institutions are the major players.

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By BrianL
09th Nov 2018 15:38

While many of us may agree with your assertion about the conduct of institutions, the defence of "I did it because other people do it." is not one on which you should rely. :-)

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