Anti-money Laundering Compliance for Law Firms
A handbook and guide, advising on practical implementation of the European Union Fourth Anti-Money Laundering Directive. Assisting European law firms in remaining compliant.
Table of Contents
|About the authors||xi|
|Chapter 1: The UK Money Laundering Regulations 2017, MLD4, and their wider implications||1|
|Policies, controls and procedures||4|
|Customer due diligence||8|
|Simplified due diligence||11|
|Enhanced due diligence||12|
|Politically Exposed Persons||13|
|Civil and criminal penalties||16|
|Chapter 2: The Proceeds of Crime Act 2002||19|
|Failure to disclose||25|
|Prejudicing an investigation||28|
|Chapter 3: Performing or refreshing your firm-wide risk assessment – practical help||29|
|What is a money laundering and terrorist financing risk assessment?||30|
|Chapter 4: Getting to grips with the Politically Exposed Person||37|
|Who is a PEP?||37|
|Persons with a close nexus to a PEP||38|
|AML duties in practice||39|
|A risk-sensitive approach to PEPs||42|
|PEPs and 5MLD||43|
|Chapter 5: Source of funds and source of wealth enquiries||45|
|Background of scale of money laundering||45|
|Relationship between the Proceeds of Crime Act and Money Laundering Regulations||45|
|What does the law say?||46|
|What doesn’t it say?||47|
|How can you assess the purpose and nature of the transaction?||48|
|What information would be appropriate to obtain?||48|
|Practical issues and common questions||49|
|Increased disciplinary focus on the legal profession||50|
|Chapter 6: Managing the risks – the need for compliance strategies||53|
|Risk management: prevention, not cure||53|
|Where to find regulatory guidance||54|
|Getting started on a compliance strategy||56|
|Chapter 7: Failure to prevent tax evasion and other provisions in the Criminal Finances Act 2017||61|
|Unexplained Wealth Orders||69|
|Changes to the SARs regime||70|
|Chapter 8: Beneficial ownership registers under the Fourth and Fifth Directives||73|
|Cross-EU implementation of UBO registers||73|
|Access to register||76|
|Beneficial ownership registers – trusts||76|
|Proposed UBO registers for other entities||78|
|Level playing field||79|
|Reliability of information||80|
|Ambiguities in the text – impact on the transposition?||81|
|Discretion in EU law||82|
|Chapter 9: Sanctions compliance for law firms||85|
|What are sanctions?||86|
|Which sanctions will apply?||87|
|Consequences of non-compliance||93|
|Law firms and sanctions||95|
|Reporting obligations for law firms||97|
|Reporting and legal professional privilege||98|
|Chapter 10: The Fifth and Sixth Money Laundering Directives||101|
|The Fifth Money Laundering Directive||101|
|Provisions focusing on high risk jurisdictions and individuals||102|
|Provisions focusing on information gathering and information sharing||103|
|Provisions focusing on currency and money products||106|
Amy Bell is a compliance consultant with a passion for helping firms adapt to the changing legal landscape. She has 13 years' experience in working with law firms, and in 2017 launched Amy Bell Compliance Limited. Through consultancy with partners, and by delivering training, she provides support for everyone in the firm, helping them to understand compliance and how to apply risk management principles to improve client service and deliver efficiencies. She is a member of the Law Society's Money Laundering Task Force, where she represents the solicitors profession at government and in Europe.
Robyn Brown is an associate at Eversheds Sutherland LLP, within the financial services disputes and investigations group. She joined the firm after a number of years working in treasury and finance for a top five UK Building Society. She has experience in all areas of financial crime, including international financial sanctions, fraud, anti-money laundering and anti-bribery & corruption. She regularly advises regulated and non-regulated corporate clients on financial crime compliance, and also has experience in defending corporate clients in respect of regulatory investigations and enforcement. Robyn conducts audits and risk assessments upon AML and sanctions control frameworks at various financial institutions, and was previously acting head of sanctions for a Japanese Investment Bank. Her recent experience includes assisting a large technology company with its sanctions compliance programme following an internal investigation and remediation project and delivering comprehensive sanctions training to a large investment bank.
Tracey Calvert is a lawyer and the director of Oakalls Consultancy Limited. She is a regulatory, compliance and ethics specialist, providing a variety of advisory services to members of the solicitor's profession. She is a regular speaker and trainer on these topics and has delivered presentations both within the UK and internationally. She is an officer of the International Bar Association's Professional Ethics Committee and a board member of both the Wilmington Group's Legal Compliance Association and the Law Society's Legal Compliance Bulletin. Tracey was previously employed by the Law Society and the SRA as a senior ethics adviser and a policy executive.
Anita Clifford is a barrister at London's Bright Line Law and a solicitor admitted to practice in Australia. Her practice centres on criminal and civil cases involving money laundering, fraud and asset freezing. Additionally, Anita advises firms on anti-money laundering issues, including the development of policies and procedures. Anita speaks regularly on anti-money laundering matters and is the author of peer-reviewed articles on aspects of financial crime. In 2018, she worked with the Council of Europe to deliver anti-money laundering training in the Republic of Moldova and Georgia.
Angela Craven is an associate in the investigations and financial crime team at TLT LLP. Angela has experience in undertaking regulatory investigations and advises clients on various aspects of regulatory compliance, governance and disclosures, including those relating to anti-bribery and corruption, anti-money laundering and the Criminal Finances Act. She also has experience of defending both corporate and individual clients. Angela deals with investigations and criminal proceedings commenced by the major enforcement bodies, including – amongst others – the Crown Prosecution Service, the Financial Conduct Authority, the National Crime Agency, the Serious Fraud Office, and Her Majesty's Revenue and Customs.
Ian Hargreaves is a partner in the white collar team in the London office of Covington & Burling LLP. Ian advises clients on major fraud – both civil and criminal elements, asset tracing and recovery, bribery and corruption, money laundering, modern slavery, sanctions, and investigations/ compliance work. He also has experience in corporate and commercial governance and risk management as well as commercial disputes and cybercrime. Ian frequently speaks at legal conferences on issues such as bribery and corruption and money laundering. He is also often quoted in the press and has written several articles on these issues together with cybercrime and modern slavery.
Deirdre Lyons Le Croy
Deirdre Lyons Le Croy is an associate in the white collar team in the London office of Covington & Burling LLP. Deirdre has advised clients in relation to enforcement actions, internal investigations and compliance programmes concerning fraud and corruption, anti-money laundering, export controls and economic sanctions, and modern slavery. She is a frequent writer on these issues in legal publications. In 2016, Deirdre acted on the landmark R v Jogee and R v Ruddock cases. In addition, Deirdre has also worked as an international regulatory advisor to the Corporation of Lloyd's of London, where she managed risks arising in Africa and Latin America concerning corruption, money laundering, sanctions, financial regulation, and market access. Deirdre is also an ambassador for Wolfson College, University of Cambridge.
Ruth Paley is of counsel at Eversheds Sutherland in the corporate crime and investigations group, with 12 years' experience at the London Bar where she was ranked in Chambers & Partners. She maintains a highly specialist corporate and financial crime practice, with extensive experience in the white collar, financial regulatory and compliance sphere. She is frequently engaged to provide strategic advice and representation to a range of multinationals, financial institutions and individuals. Recent work includes undertaking a detailed and complex AML review in respect of a series of suspicious transactions for a European bank and preparing a comprehensive AML risk assessment under the Money Laundering Regulations 2017 for a regulated Global Top 20 law firm.
Michael Ruck is a partner in TLT's financial services team in London. Michael previously spent four-and-a-half years at another City law firm in the corporate crime, investigations and enforcement team; prior to that, he spent almost six years working in the FCA's enforcement and market oversight division. Michael is a highly experienced investigations lawyer, with a broad range of experience including advisory, regulatory liaison and large-scale, complex and multi-jurisdictional investigations. His experience spans various regulatory issues and he has worked closely with a number of UK and foreign regulators, including the FCA, SFO, ICO, DOJ and IRS. Michael has a deep understanding of a wide range of regulatory issues and procedures, making him a trusted advisor to his clients, often at board level.
Zia Ullah is head of the corporate crime and investigations group in Eversheds Sutherland's financial services disputes and investigations team, specialising in international sanctions, AML and ABC. He advises on all aspects of financial crime compliance and was previously the global head of sanctions at Barclays. He is recognised by Chambers and Partners as a "leader in the field" of corporate crime and investigations. His relevant skills and experience include acting on behalf of Barclays in the reported case of Hmicho v Barclays Bank – the lead case on ownership and control in relation to EU and UK Sanctions – and supporting a global, UK-headquartered bank with enhancements to its sanctions compliance processes.
Shazia Zamir is an associate with Teal Compliance and director of SZ Compliance Consulting. She is a compliance consultant with 20 years' experience working in risk and compliance roles within legal, financial and enforcement environments. She has a down-to-earth and practical approach to compliance, ensuring that the solutions she proposes are workable and effective.