Anti-Money Laundering Policy

Conclusion

10.1 The legislative requirements concerning anti-money laundering procedures are lengthy and complex. This policy has been written so as to enable the Council to meet the legal requirements in a way which is proportionate to the very low risk to the Council of contravening the legislation.

10.2 Should you have any concerns whatsoever any transactions then you should contact the MLRO

Section Ref Definition	Type of Offence	Definition
S327 Proceeds of Crime Act 2002	Money Laundering Offence: Concealing Criminal Property	A person commits an offence if they conceal, disguise, convert or transfer criminal property or if they remove criminal property from England, Wales, Scotland or Northern Ireland. This is punishable by a maximum term of imprisonment of 14 years at the Crown Court and an unlimited fine. At the Magistrates Court it is 6 months and £5,000 fine.
S328 Proceeds of Crime Act 2002	Money Laundering Offence: Acquisition, Use and Possession	This offence is committed by anyone that has criminal proceeds in their possession provided they know or suspect that it represents the proceeds of a crime unless they paid 'adequate consideration' for it. Someone who pays less than the open market value is therefore guilty of the offence but someone who pays the full retail price, despite knowing or suspecting they are stolen goods is not guilty. The punishment is as for S327.
S329 Proceeds of Crime Act 2002	Money Laundering Offence: Acquisition, Use and Possession	This offence is committed by anyone that has criminal proceeds in their possession provided they know or suspect that it represents the proceeds of a crime unless they paid 'adequate consideration' for it. Someone who pays less than the open market value is therefore guilty of the offence but someone who pays the full retail price, despite knowing or suspecting they are stolen goods is not guilty. The punishment is as for S327
S330 Proceeds of Crime Act 2002	Failure to Disclose Offence: Regulated Sector	This offence is committed by an employee of a business in the regulated sector who has knowledge or suspicion of another person's involvement in money laundering and does not make a report through the appropriate channels. Negligence is not a defence as the employee will be tried upon what they should have known given their 14 experience, knowledge and training. This is punishable by a maximum term of imprisonment of 5 years and/or a fine.
S331 Proceeds of Crime Act 2002	Failure to Disclose Offence: Nominated Officers in the Regulated Sector	This offence is committed by a nominated officer (MLRO) of a business in the regulated sector who has knowledge or suspicion of another person's involvement in money laundering and does not make a report through the appropriate channels without an acceptable excuse under the legislation. Negligence is not a defence as the nominated officer will be tried upon what they should have known given their experience, knowledge and training. This is punishable by a maximum term of imprisonment of 5 years and/or a fine.
S332 Proceeds of Crime Act 2002	Failure to Disclose Offence: Other Nominated Officers	This offence is committed by a nominated officer (MLRO) of a business outside of the regulated sector who has knowledge or suspicion of another person's involvement in money laundering and does not make a report through the appropriate channels without an acceptable excuse under the legislation. The officer will be tried on what they knew or suspected not on what they might have been expected to know or suspect. This is punishable by a maximum term of imprisonment of 5 years and/or a fine.
S333 Proceeds of Crime Act 2002	Tipping Off Offence	This offence is committed if an officer or Member makes a disclosure which is likely to prejudice an investigation being carried out by a law enforcing authority, knowing that such an investigation is in motion. This is punishable by a maximum term of imprisonment of 5 years and/or a fine.
Reg 86 Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017	Contravening a relevant requirement	A person commits an offence if they have not followed any relevant guidance issued by the European Supervisory Authorities, Financial Conduct Authority or any other relevant supervisory authority approved by the Treasury. This is punishable by a maximum term of imprisonment of 2 years at the Crown Court, a fine, or both. At the Magistrates Court a term of three months, a fine, or both.
Reg 87 Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017	Prejudicing an investigation	This offence is committed when a person who knows or suspects that an appropriate officer is acting (or proposing to act) in connection with an investigation into potential contravention of a relevant requirement which is being or is about to be conducted. The offence is committed if either they make a disclosure which is likely to prejudice the investigation or they falsely, conceal, destroy or otherwise dispose of, or cause to permit the falsification, concealment, destruction or disposal of, documents which are relevant to the investigation. The punishment is as for Reg. 86 above.
Reg 88 Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017	Providing false or misleading information	There are two separate offences under regulation 88. Under regulation 88(1) a person commits an offence if: 1. In purported compliance with a requirement imposed on him by or under the MLR 2017, provides information which is false or misleading in a material particular and knows that the information is false or misleading; or 2. Is reckless as to whether the information is false or misleading. In respect of both offences, the punishment is the same as Regs 86 and 87 above.

Section Ref Definition

Type of Offence

Definition

S327 Proceeds of Crime Act 2002

Money Laundering Offence:

Concealing Criminal Property

A person commits an offence if they conceal, disguise, convert or transfer criminal property or if they remove criminal property from England, Wales, Scotland or Northern Ireland.

This is punishable by a maximum term of imprisonment of 14 years at the Crown Court and an unlimited fine.

At the Magistrates Court it is 6 months and £5,000 fine.

S328 Proceeds of Crime Act 2002

Money Laundering Offence:

Acquisition, Use and Possession

This offence is committed by anyone that has criminal proceeds in their possession provided they know or suspect that it represents the proceeds of a crime unless they paid 'adequate consideration' for it.

Someone who pays less than the open market value is therefore guilty of the offence but someone who pays the full retail price, despite knowing or suspecting they are stolen goods is not guilty.

The punishment is as for S327.

S329 Proceeds of Crime Act 2002

Money Laundering Offence:

Acquisition, Use and Possession

Someone who pays less than the open market value is therefore guilty of the offence but someone who pays the full retail price, despite knowing or suspecting they are stolen goods is not guilty.

The punishment is as for S327

S330 Proceeds of Crime Act 2002

Failure to Disclose Offence:

Regulated Sector

This offence is committed by an employee of a business in the regulated sector who has knowledge or suspicion of another person's involvement in money laundering and does not make a report through the appropriate channels.

Negligence is not a defence as the employee will be tried upon what they should have known given their 14 experience, knowledge and training.

This is punishable by a maximum term of imprisonment of 5 years and/or a fine.

S331 Proceeds of Crime Act 2002

Failure to Disclose Offence:

Nominated Officers in the Regulated Sector

This offence is committed by a nominated officer (MLRO) of a business in the regulated sector who has knowledge or suspicion of another person's involvement in money laundering and does not make a report through the appropriate channels without an acceptable excuse under the legislation.

Negligence is not a defence as the nominated officer will be tried upon what they should have known given their experience, knowledge and training.

This is punishable by a maximum term of imprisonment of 5 years and/or a fine.

S332 Proceeds of Crime Act 2002

Failure to Disclose Offence:

Other Nominated Officers

This offence is committed by a nominated officer (MLRO) of a business outside of the regulated sector who has knowledge or suspicion of another person's involvement in money laundering and does not make a report through the appropriate channels without an acceptable excuse under the legislation.

The officer will be tried on what they knew or suspected not on what they might have been expected to know or suspect.

This is punishable by a maximum term of imprisonment of 5 years and/or a fine.

S333 Proceeds of Crime Act 2002

Tipping Off Offence

This offence is committed if an officer or Member makes a disclosure which is likely to prejudice an investigation being carried out by a law enforcing authority, knowing that such an investigation is in motion.

This is punishable by a maximum term of imprisonment of 5 years and/or a fine.

Reg 86

Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017

Contravening a relevant requirement

A person commits an offence if they have not followed any relevant guidance issued by the European Supervisory Authorities, Financial Conduct Authority or any other relevant supervisory authority approved by the Treasury.

This is punishable by a maximum term of imprisonment of 2 years at the Crown Court, a fine, or both. At the Magistrates Court a term of three months, a fine, or both.

Reg 87

Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017

Prejudicing an investigation

This offence is committed when a person who knows or suspects that an appropriate officer is acting (or proposing to act) in connection with an investigation into potential contravention of a relevant requirement which is being or is about to be conducted.

The offence is committed if either they make a disclosure which is likely to prejudice the investigation or they falsely, conceal, destroy or otherwise dispose of, or cause to permit the falsification, concealment, destruction or disposal of, documents which are relevant to the investigation.

The punishment is as for Reg. 86 above.

Reg 88

Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017

Providing false or misleading information

There are two separate offences under regulation 88. Under regulation 88(1) a person commits an offence if:

1. In purported compliance with a requirement imposed on him by or under the MLR 2017, provides information which is false or misleading in a material particular and knows that the information is false or misleading; or

2. Is reckless as to whether the information is false or misleading.

In respect of both offences, the punishment is the same as Regs 86 and 87 above.

Appendix B

POSSIBLE SIGNS OF MONEY LAUNDERING

Types of risk factors which may, either alone or along with other factors suggest the possibility of money laundering activity:

General

A new customer with no previous 'history' with the Council;
A secretive customer: for example, one who refuses to provide requested information without a reasonable explanation;
Concerns about the honesty, integrity, identity of a customer;
Illogical third party transactions: for example, unnecessary routing or receipt of funds from third parties or through third party accounts;
Involvement of an unconnected third party without logical reason or explanation;
Payment of a substantial sum in cash (but it's reasonable to be suspicious of any cash payments particularly those over £1,000);
Overpayments by a customer;
Absence of an obvious legitimate source of the funds;
Movement of funds to/from overseas, particularly to and from a higher risk country;
Where, without reasonable explanation, the size, nature and frequency of transactions or instructions is out of line with normal expectations;
A transaction without obvious legitimate purpose or which appears uneconomic, inefficient or irrational;
Cancellation or reversal of an earlier transaction;
Requests for release of customer account details other than in the normal course of business;
Poor business records or internal accounting controls;
A previous transaction for the same customer which has been, or should have been, reported to the MLRO.

Property Matters

Unusual property investment transactions with no apparent investment purpose;
Instructions to receive and pay out money where there is no linked substantive property transaction involved (surrogate banking);
Regarding property transactions, funds received for deposits or prior to completion from an unexpected source or where instructions are given for settlement funds to be paid to an unexpected destination. The following table sets out the types of activities that might be suspicious and where the council may be susceptible to money laundering activities. It is not intended to be exhaustive, and just because something is not on the list, it doesn't mean that it shouldn't be reported

ACTIVITY	The types of activity that may be affected
New customers with high value transactions	Selling property to individuals or businesses Renting out property to individuals or businesses Entering into other lease agreements Undertaking services for other organisations
Secretive clients	Housing benefit claimants who have sums of money entering into /out of their bank account (even if we do not award them benefit, we should still consider money laundering implications) People buying or renting property from the council who may not want to say what it is for People receiving grant funding who refuse to demonstrate what funding was used for
Customers who we think are acting dishonestly or illegally	People paying for council services who do not provide details about themselves People making odd or unusual requests for payment arrangements Illogical transactions People paying in cash then requesting refunds Requests for the council to pay seemingly unconnected third parties in respect of goods / services provided to the council Requests for the council to pay foreign currencies for no apparent reason Payments of substantial sums by cash Large debt arrears paid in cash Refunding overpayments Deposits / payments for property Movement of funds
Payments of substantial sums by cash	Large debt arrears paid in cash Refunding overpayments Deposits / payments for property
Payments of substantial sums by cash	Large debt arrears paid in cash Refunding overpayments Deposits / payments for property
Movement of funds overseas	Requests to pay monies overseas, potentially for "tax purposes"
Cancellation of earlier transactions	Third party "refunds" grant payment as no longer needed / used No payment demanded even though goods / services have been provided Sudden and unexpected termination of lease agreements
Requests for client account details outside normal course of business	Queries from other companies regarding legitimacy of customers Council receiving correspondence /information on behalf of other companies
Extensive and overcomplicated client business structures /arrangements	Requests to pay third parties in respect of goods / services Receipt of business payments (rent, business rates) in settlement from seemingly unconnected third parties
Poor accounting records and internal financial control	Requests for grant funding / business support indicates third party not supported by financial information Companies tendering for contracts unable to provide proper financial information / information provided raises concerns Tender for a contract which is suspiciously low
Unusual property investment or transactions	Requests to purchase Council assets / land with no apparent purpose Requests to rent Council property with no apparent business motive
Overcomplicated legal arrangements / multiple solicitors	Property transactions where the Council is dealing with several different parties