Anti-Money Laundering Systems & Training

The European 3rd Directive on Money Laundering was introduced to UK legislation by the Money Laundering Regulations 2007 (“MLR”).  The regulations entered into force on 15 December 2007.

Whereas Money Laundering Legislation has affected Financial Institutions and those conducting Investment Business since 1st April 1994, the new Regulations extend the law to accountants, auditors, insolvency practitioners, tax advisers, lawyers involved in transactions, estate agents and dealers in high value goods etc.

The EU third Directive on Money Laundering entered into force in December 2005. With UK implementation on 15 December 2007 (via the Money Laundering Regulations 2007), there were significant and extensive changes to the Regulations with enhanced supervision.

A proposed EU 4th Directive will cause the scope of the regulations to be extended even further.

The test for the reporting of suspicious transactions has been raised from a subjective test of suspicion to the objective test of having reasonable grounds for suspicion. This enhances the risk of prosecution for the failure to report a suspicion of money laundering including tax evasion.

The Legislation carries Criminal Sanctions ranging from 2 years for failure to have in place systems and procedures for the prevention of Money Laundering to 14 years for involvement.

Those falling within the enhanced scope of the regulations are required to have in place on 15th December 2007 risk based systems and procedures for the prevention of Money Laundering.  This includes an obligation to provide initial and ongoing training for all employees.

We are able to provide generic or risk based bespoke systems and training to enable businesses to comply with their new obligations under the regulations.

There are many products available in the market place and we advise the use of caution in the selection process.  You will need to ensure that the procedures and training regime offered will enable your business to actually comply with, rather than pay vague lip service to, the law. We are expert in this area and understand the difference!

In order to assist businesses within the newly Regulated Sector we have developed (in conjunction with a Barrister at Law and a leading e-learning software company) a unique web based solution providing required training and systems and procedures for Money Laundering Reporting Officers “MLRO’s”:- The AML Compliance Centre.

What is the AML Compliance Centre?

The AML Compliance Centre offers a unique comprehensive anti-money laundering compliance solution for MLRO’s (Money Laundering Reporting Officers), Management and Employees (there are three separate courses).  It provides the following:

  1. Compliance with the law (This is subject to the proper and continuous implementation of the AML Compliance Centre systems and procedures).
  2. A web based solution with minimal set-up requirements: on-line monitoring and audit of AML training and performance including examination results and complete administration facilities.
  3. A user definable examination pass mark.
  4. A highly cost effective (staff are trained at their desks at any convenient time) and tax deductible full service solution.

The AML Training and Compliance Centre contains the following features:-

  • Up-dates, stop press and articles of interest and the contact details of the MLRO.
  • Three Training Courses:  MLRO, Management and relevant employee training.
  • An Examination Facility:  There are adjustable benchmarks with on-line administration and audit facilities which enable firms to PROVE compliance with the law.
  • System & Procedures:  An on-line compliance manual, mandatory procedures and relevant forms for the use of MLRO’s and employees.
  • Reference Library:  Relevant legislation, Statements of Principle, Supervisory and Professional body guidance notes.

In addition to training, both initial and ongoing, the interactive software provides a wide ranging compliance solution.

The AML Compliance centre has been developed in association with Routes to Training Ltd, Simon Stafford-Michael, Barrister, and Martyn Bridges of Bridges & Partners, respectively the author and editor of the on-line compliance manual. They are supported by a number of editorial board members from the legal professions and other industry experts.

The author: Simon Stafford-Michael

Simon Stafford-Michael was a practising barrister from 1982 until 2005. He specialised in white collar crime, with particular emphasis on commercial and corporate fraud and Money Laundering. He has appeared for the defence in numerous prosecutions brought by the Serious Fraud Office (including the Guinness, Arrows and WSTC cases), Inland Revenue (including, most notably, the Hunt (Nissan UK) and Spectron (UK) cases) and Customs & Excise. He appeared for the third defendant in Jyske Bank (Gibraltar) Limited, a year long Chancery action involving the tracing of very substantial sums through a number of jurisdictions.

He has particular experience in money-laundering matters, in which he has developed a substantial advisory practice. This has ranged from advising on proposed floatation’s, Inland Revenue investigations, clawing back sums generated by unlawful internet sales and advising and representing the target firm at the centre of Operation Ivan, one of the largest investigations into Money Laundering in the UK.

Simon was recommended by Chambers & Partners Directory as a leading junior in the “fraud” category of work. He is a consultant editor to the Journal of Money Laundering Control.

Simon worked in commerce from 2005 until he returned to the bar in October 2008.

Editor: Martyn Bridges

Martyn is a tax and forensic accounting specialist with over 30 year’s full time experience. He is a member of The Academy of Experts and a Certified Fraud Examiner.

Prior to establishing Bridges & Partners Martyn spent 18 years as a partner with Deloitte and Touché LLP London, and was the National Practice Leader of the firm’s Investigation Services Group. In that role he provided extensive AML training. He also advised clients in connection with Money Laundering investigations, both domestic and international, fiscal disputes and investigations and commercial fraud investigations. Martyn has extensive experience of litigation, both civil & criminal.

Prior to joining Deloitte Martyn was a commercial fraud investigator for a large multi-national company.  In that role, he investigated and advised on litigation in relation to many types of procurement fraud, diversion of profit and embezzlement. Previously Martyn served in the Inland Revenue as a District Inspector of Taxes and Senior Investigator in what became Special Compliance Office:-detecting, investigating & prosecuting serious tax fraud.

Martyn has lectured internationally on the subjects of Commercial Fraud, Money Laundering and Tax investigations and is a contributor to the following publications:

  • International Tracing of Assets (FT Law & Tax, ISBN 075200 4123)
  • Investigations Service (Butterworths, ISBN 0.406 036608)
  • A Practitioner’s Guide to International Money Laundering Law and Regulation (City and Financial, ISBN 898830 68 1)
  • Betterworths Money Laundering Law (Lexis)
  • HMRC Investigations (Bloomsbury)

Martyn is a Member of the Editorial Advisory Boards of:

  • Journal of Financial Crime.
  • Journal of Money Laundering Control.
  • International Journal of Disclosure and Governance

Martyn is General Editor of Butterworths Money Laundering Law.

Who should be interested?

Any business falling within the “Regulated Sector” as defined by the Money Laundering Regulations 2007 (MLR). This includes (inter alia) Financial Services, Accountants, Auditors, Corporate & Trust Service Providers, Estate Agents, Insolvency Practitioners and Lawyers.

Why Does your Business Need to Comply?

You are required by Regulation 20 of the MLR to establish risk based policies and procedures.

Regulation 21 requires firms to train relevant staff, this obligation is ongoing.

Firms affected by the Regulations are now subject to Supervision and Enforcement from their Regulator. As well as criminal sanctions there is now provision for the award of Civil Penalties for failure to comply with the Regulations.

We have assisted regulated firms in dealing with regulatory audits and inspections and have negotiated satisfactory outcomes.

What are the Penalties for Failure to Comply?

The MLR Regulation 45 provides for penalties for:-

Conviction on indictment, to imprisonment for a term not exceeding 2 years, to a fine or to both;

On summary conviction, to a fine not exceeding the statutory maximum.

A failure to establish and implement proper systems and procedures may also result in:-

  1. An offence under the primary legislation which carries a sentence of up to 14 years imprisonment plus an unlimited fine. Note a statutory defence is provided to staff if they have not been trained as required by the Law. Such a claim by a member of staff may place Management in some considerable difficulty!!
  2. Reputational damage.
  3. Professional and Regulatory proceedings.
  4. Difficulties with Professional Indemnity Insurance

The Competition

There are numerous products on the market which purport to offer systems and procedures and training which is compliant with the Regulations.  Indeed some of these “solutions” cost very little.

When evaluating the solutions available we suggest that you ask the following questions:-

  1. Who are the authors/providers and what is their credibility?
  2. Do the authors include lawyers and industry experts who specialise in AML law and practice?
  3. Does the product include a comprehensive compliance manual? (Which is a legal requirement).
  4. Does the product, if properly implemented, enable your organisation to comply with the law by providing proper risk based policies and procedures (including appropriate systems) together with adequate training for employees?
  5. Is the product regularly updated and include a Reference Library and useful web links, all of which are available on-line?
  6. Does the product provide a web based interactive learning platform which enables the MLRO to monitor and PROVE that employees have, and continue to be, properly trained?
  7. Does the platform provide MLRO’s with a cost effective administrative solution including email management?
  8. Is advice and back-up available to deal with implementation and operational difficulties?
  9. Does the product provide a secure environment with a web based administrative record of training undertaken?
  10. Can a compliance system be developed, integrated and implemented to suit your specific requirements?

We are unaware of any competing product which uses a platform similar to that used by the AML Compliance Centre.

We believe that the AML Compliance Centre provides a unique and cost effective solution to the regulated sector.

For further information please contact Martyn Bridges on 01438 940903.