AML News and Updates
Last updated 6 September 2010
Updated advice on money laundering controls in overseas jurisdictions
HM Treasury has issued updated advice about risks posed by unsatisfactory money laundering controls in a number of jurisdictions.
Further details>>
Case update: Firms at risk of civil action over SOCA reports?
Court of Appeal decision in the case of Shah v HSBC Private Bank (UK) Ltd. Claim for failing to carry out customer’s instructions following notification to SOCA struck out; suspicion was a purely subjective matter, and absent any allegation of want of good faith, did not have to be a reasonable one. The Court of Appeal confirmed the test of suspicion as set out in the cases of Da Silva and K Limited - a suspicion does not have to be on reasonable grounds, just that the possibility has to be 'more than fanciful'. [2010] EWCA Civ 31
Sue Mawdsley comments in a Gazette article following the CA decision >>
Further details and comment by the Law Society >>
More money laundering cases >
SOCA reports
SOCA has published three reports:
- Annual Annual Plan for 2010-11
- SOCA Suspicious Activity Reports Regime Annual Report 2009: Third annual report
- Annual Threat Assessment for 2009/10 which includes a new section on international money flows. Mortgage fraud and identity fraud remain key issues for solicitors.
Law Society Practice Note UPDATED 29 October 2009
HM Treasury has formally approved the Law Society's updated Anti Money Laundering Practice Note - in force from 29 October 2009. The practice note replaces the previous version dated 22 February 2008.
For help with updating your compliance procedures contact us.
Solicitor jailed 4 years for money laundering
Shadab Khan, an award-winning senior partner of a Bradford law firm, and previously of impeccable character, was convicted of one charge of money laundering and two of failing to disclose a suspicion of money laundering. Khan carried out property conveyances for a drug dealer who had been putting cash into properties, either himself or through third parties, and Khan either knew or suspected what was happening. The judge told him it was incomprehensible why he had committed the offences, “beyond either sheer greed or a naivety that went beyond stupidity.” Disciplinary proceedings would follow. Read more >>
Mortgage Fraud Practice Note - UPDATED
The Law Society practice note on mortgage fraud has been updated with effect from 15 April 2009, in the light of new methodologies emerging as a result of the economic climate.
Review of compliance report
The Law Society have published a compliance survey completed by a number of firms a year after implementation of the third money laundering directive - 'Anti-money laundering compliance by the legal profession in England and Wales' (January 2009).
Solicitor fined for money laundering
Jonathan Krestin, a solicitor and an MLRO, was convicted on 19 November 2008 and fined £5,000 for entering into an arrangement which facilitated the laundering of money .
He used the firm's client account to transfer €14,000 into an Italian bank account for a client - a convicted fraudster - only days after receiving a court order outlining a number of offences, including carousel fraud, to which his client was about to plead guilty. Read more >
Warning of individual fines for MLROs
The FSA issued its first fine to an MLRO for failing to to implement adequate procedures for controlling money laundering risk. The fine is a warning to firms and their MLROs on the consequences for non compliance. Gazette article >> FSA press release>>
Guidance for Legal Professionals
FATF have published Guidance for Legal Professionals using a risk based approach.
More publications can be found on Money Laundering Practice Guidance page and Articles & Publications page.
Warning of serious threats posed to the international financial system
HM Treasury has issued advice about the heightened risk as a result of deficiencies in AML/CTF systems in certain jurisdictions. See press release.
Anti-money laundering - equivalent jurisdictions
HM Treasury has issued a list of countries considered as having equivalent AML/CFT systems to the EU. However, the Law Society and the Treasury warn that solicitors should continue to apply risk based procedures when dealing with clients in these jurisdictions. The list includes: Argentina, Australia, Brazil, Canada, Hong Kong, Japan, Mexico, New Zealand, Russian Federation, Singapore, Switzerland, South Africa and the US.
Police intelligence report on mortgage fraud
ACPO have issued a press release on commitment to tackling mortgage fraud.
Amendment to Tipping Off offences
The Terrorism Act 2000 and Proceeds of Crime Act 2002 (Amendment) Regulations 2007 come into force on 26 December 2007. The government has held back from its original proposal to remove the 'prejudice' test. The sentence is reduced to two years.
Mortgage fraud warning
The Law Society issued a new warning on mortgage fraud on 12 December 2007 as a result of the recent slowdown in the property market.
Anti-Terrorism Practice Note
The Law Society Anti Terrorism Practice Note on the conflicting duties of maintaining client confidentiality and reporting terrorism.
SAR confidentiality
MLROs who are concerned about apparent / suspected breaches in their SAR disclosures should ring the SOCA hotline 0800 234 6657 to report their concerns.
The Law Society advises that it is important that these breaches are reported because SOCA has promised to provide statistics in an annual report about the number of breaches.
Money Laundering FAQs
The Law Society have produced a helpful list of Frequently Asked Questions in order to help solicitors and their staff understand their money laundering obligations. The Law Society have withdrawn their dedicated Money Laundering Helpline.
For advice on money laundering problems and details of our helpline service, call us on 0845 330 6791 or email us.