Money Laundering Regulations

Money Laundering Regulations

When we sign up a client we have to get photo ID and proof of address – why?

The term money laundering describes the practice of exchanging criminally gained money or assets for ‘clean’ money or assets. This also includes money which is used to finance terrorist activity, regardless of how the money is obtained. The clean money or assets exchanged do not have an obvious link with illegal activity and are therefore difficult to trace back to their criminal source.

The Money Laundering Regulations came into effect in 2007. They were introduced as a measure to protect the UK financial system from money laundering schemes.

 

Businesses covered by the regulations

Businesses that are covered by the regulations must have controls in place to prevent them being used for money laundering purposes by criminals and terrorists. Business sectors which come under the Money Laundering Regulations include financial and credit businesses, estate agents, accountants and accountancy service providers.

 

Anti-money laundering controls

All businesses covered by the regulations must be supervised by a supervisory authority. (Businesses who do not have a professional supervisory body may need to register with HMRC.)

These businesses must also actively carry out the following:

• Assess the risk of the business being used for criminal money laundering purposes

• Check the identity of clients

• Check the identity of ‘beneficial owners’ of corporate bodies and partnerships

• Monitor client business activity and report anything suspicious to the Serious Organised Crime agency (SOCA)

• Ensure appropriate management control systems are in place

• Keep all documents which relate to financial transactions, the identity of clients, risk assessments, management procedures and processes

• Ensure all employees are aware of the regulations and have had the necessary training

 

Photo ID and proof of address requirements for new clients

Intouch Accountancy is one of the business sectors included under the Money Laundering Regulations. As such we must abide by these and apply the relevant anti-money laundering controls within our business processes. It is for this reason that we must ask you for photo ID and proof of address when we sign you up as a new client.

 

This blog has been prepared by Intouch Accounting. While we have made every attempt to ensure that the information contained in this blog has been obtained from reliable sources, Intouch is not responsible for any errors or omissions, or for the results obtained from the use of this information. This blog should not be used as a substitute for consultation with professional accounting advisers. If you have any specific queries, please contact Intouch Accounting.