Proceeds of Crime Act (Anti-Money Laundering) & Know Your Customer Policy

INTRODUCTION

1.1 Money laundering is the process by which criminals attempt to conceal the true origin and ownership of the proceeds of their criminal activities. If they are successful, it also allows them to maintain control over their proceeds and, ultimately, to provide a legitimate cover for their source of funds. Legislation concerning money laundering (the Terrorism Act 2000, the Proceeds of Crime Act 2002 and the Money Laundering Regulations 2007) has broadened the definition of money laundering and increased the range of activities caught by the statutory framework. As a result, the obligations now impact on more areas of business activity and require businesses to establish internal procedures to prevent the use of their services for money laundering.

2. SCOPE OF THE POLICY

2.1 This Policy applies to all employees of MediaBlanket Ltd trading as Credit Knowledge and aims to maintain the high standards of conduct which currently exist within the company by preventing criminal activity through money laundering. The Policy sets out the procedures which must be followed (for example the reporting of suspicions of money laundering activity) to enable the company to comply with its legal obligations.

These obligations require the company to identify, assess, monitor, and manage its money laundering risk. They need to be proportionate, taking into account the following: -

  • Nature
  • Complexity and
  • Scale of the firm’s business

2.2 Anti money laundering legislation places responsibility upon MediaBlanket Ltd trading as Credit Knowledge employees to combat money laundering and covers a very wide area of financial transactions, including possessing, or in any way dealing with, or concealing, the proceeds of any crime. It applies to all employees involved with monetary transactions.

2.3 Under the legislation it is a criminal offence to:

  • assist a money launderer
  • "tip off” a person suspected to be involved in money laundering that they are suspected or that they are the subject of police investigations
  • fail to report a suspicion of money laundering and
  • acquire, use, or possess criminal property
3. PURPOSE

3.1 The legislative requirements concerning anti-money laundering procedures are extensive and complex. This Policy has been written to enable the company to meet the legal requirements in a way which is proportionate to the exceptionally low risk to the company of contravening this legislation.

3.2 The object of this policy is to make all employees aware of their responsibilities and the consequences of non-compliance with this policy.

3.3 Any employee could potentially be caught by the money laundering provisions if they suspect money laundering and either become involved with it in some way and /or do nothing about it

3.4 Whilst the risk to the company of contravening the legislation is low, it is extremely important that all employees are familiar with their legal responsibilities.

4. MONEY LAUNDERING REQUIREMENTS, FROM MEDIABLANKET LTD T/AS CREDIT KNOWLEDGE’S POINT OF VIEW

4.1. Provision of training and guidance to relevant officers and staff on the requirements of the legislation, including the identification of suspicious transactions, identity verification and reporting procedures.

4.2. Establishment of procedures for employees to report any suspicions to the Money Laundering Reporting Officer (“MLRO”) – i.e. the Finance Manager (Nominated Deputy – Compliance Manager).

4.3. Designation of an officer as the Money Laundering Reporting Officer, who will receive any report, keep records and if considered appropriate, make reports to the National Crime Agency (NCA) - i.e. the Finance Manager (Nominated Deputy – Compliance Manager).

4.4. Under the legislation employees dealing with money transactions will be required to comply with certain procedures.

5. RECOGNISING MONEY LAUNDERING

5.1 At all times staff should:

  • be wary of unusually large cash transactions or unusual payment methods used or requested
  • be wary of the absence of an obvious legitimate source of funds
  • be alert to the possibility of money laundering by a client, a prospective client, an affiliate/supplier, or a prospective affiliate/supplier
  • be alert to the possibility of fraudulent supplies by an affiliate/supplier, thereby causing a payment to be made for illegal activity

5.2 Possible signs of money laundering are set out in Appendix 2.

6. CLIENT IDENTIFICATION PROCEDURES

6.1 Client identification procedures apply when the company is carrying out relevant business and: -

  1. Forming a business relationship: or
  2. Considering undertaking a one-off transaction

and: -

  1. Suspect a transaction involves money laundering; or
  2. A payment is to be made for a series of linked one off transactions involving total payment of £10,000 or more.

6.2 Not all of the company’s business is “relevant” for the purposes of the legislation regarding client identification. For example, our position as a Credit Reporting Service rather than a lender would mean that our responsibilities vis a vis identification of each applicant are reduced;

6.3 Finance staff must follow the procedures set out in Appendix 1 in order to ascertain the true identity of clients and ensure record keeping procedures (e.g., for evidence of identity obtained, details of transactions undertaken, for at least 5 years afterwards).

7. RECORD KEEPING PROCEDURES

This is so they may be used as evidence in any subsequent investigation by the authorities into money laundering.

7.1 The precise nature of the records is not prescribed by law however they must be capable of providing an audit trail during any investigation, for example distinguishing the person or organisation and the relevant transaction and recording in what form any funds were received or paid. In practice, Credit Knowledge will be routinely making records of work carried out for persons or organisations in the course of normal business and these should be sufficient for this requirement.

8. REPORTING PROCEDURES

8.1 To comply with the legislation all staff are required to follow the reporting procedures set out in this policy if they have knowledge of or suspicion of money laundering taking place.

8.2 The Officer nominated to receive disclosures about potential money laundering activity within the company is the Finance Manager i.e. The Money Laundering Reporting Officer (MLRO). The Deputy Money Laundering Reporting Officer is the Compliance Manager.

8.3 Where an employee knows or suspects that a money laundering activity is taking place, they must contact the MLRO for guidance as soon as possible regardless of the amount involved.

8.4 Employees must still report their concerns, even if they believe someone else has already reported their suspicions of the same money laundering activity.

8.5 After reporting, the employee must not make any further enquiries into the matter and at no time and under no circumstances should they voice any suspicions to the person(s) whom they suspect of money laundering, otherwise, they may commit a criminal offence of “tipping off”. Also, they should not record on a client file that the MLRO has been notified – should the client exercise their right to see the file, then such a note will obviously tip them off to the report having been made and may render you liable to prosecution.

9. ACTION BY THE MONEY LAUNDERING REPORTING OFFICER

9.1 The MLRO will evaluate the disclosure and any other relevant information to determine whether:

  • Actual or suspected money laundering is taking place; or
  • There are reasonable grounds to know or suspect that this is the case; and
  • NCA’s consent is needed before a particular transaction can proceed.

9.2 If the MLRO concludes that actual / suspected money laundering is taking / has taken place, then unless there are reasonable grounds for non-disclosure, the matter will be disclosed to NCA in the appropriate manner as soon as is practicable.

9.3 Where consent is required from NCA for a transaction(s) to proceed, then the transaction(s) in question must not be undertaken or completed until either:

  • NCA has specifically given consent; or
  • There is deemed consent through the expiration of the relevant time limits without objection being received from the NCA.

9.4 The MLRO will keep all records relating to an investigation for at least five years from its conclusion and in compliance with the Data Protection and Freedom of Information Acts and document retention requirements.

APPENDIX 1

IDENTIFICATION PROCEDURE AND RECORD KEEPING PROCEDURES FOR STAFF

General

The procedures set out in this Appendix apply to company employees conducting ‘relevant business’ (set out below). “Relevant” for the purposes of the legislation is the provision by way of business of:

  • services to affiliates/suppliers whereby we accept applications from them in order to give Credit Reporting facilities to the members of the public who are applying.

Identification Procedure

Where the company is carrying out relevant business (the provision of accountancy, audit and certain legal services ‘by way of business’ to third parties) and:

  1. forms an ongoing business relationship with a client; or
  2. undertakes a one-off transaction involving payment by or to the client of approximately £10,000 or more; or
  3. undertakes a series of linked one-off transactions involving total payment by or to the client(s) of approximately £10,000 or more; or
  4. it is known or suspected that a one-off transaction (or a series of them) involves money laundering; then this Identification Procedure must be followed before any business is undertaken with that organisation or person. For the procedure, you must obtain satisfactory evidence of identity, as soon as practicable after instructions are received (unless evidence has already been obtained). This applies to existing and new persons or organisations, but identification evidence is not required for matters entered prior to 1 March 2004.

Satisfactory evidence is evidence which:

  • is capable of establishing, to the satisfaction of the person receiving it, that the client is who they claim to be; and
  • does in fact do so.

Evidence of identity should be obtained as follows:

  1. Signed, written instructions on official letterhead at the outset of a particular matter. Such correspondence should then be placed on the company’s file along with a prominent note explaining which correspondence constitutes the evidence and where it is located.
  2. If you are undertaking work for a new persons or organisations or further instructions from a person or an organisation not well known to you, then you may also wish to seek additional evidence of the identity of key individuals in the organisation and of the organisation itself, for example:
    • checking the organisation’s website to confirm the business address.
    • attending them at their business address.
    • asking the key contact employee to provide evidence of their personal identity and position within the organisation; for example, signed, written confirmation from their Head of Service or Chair of the relevant organisation.

If satisfactory evidence of identity is not obtained at the outset of the matter, then the business relationship or one-off transaction(s) cannot proceed any further until this becomes available.

The law states that particular care must be taken when the person or organisation that is paying you to do work is not physically present when being identified: this can be the case for the company, and therefore instructions will usually be given in writing.

General guidance on money laundering legislation suggests that fairly rigorous identification checks should be made: for example, in relation to an organisation, evidence should be obtained as to the identity of key individuals within the organisation along with evidence of identity of the business entity and its activity.

APPENDIX 2

POSSIBLE SIGNS OF MONEY LAUNDERING

It is impossible to give a definitive list of ways in which to spot money laundering or how to decide whether to make a report to the MLRO. The following are types of risk factors that may, either alone or cumulatively with other factors, suggest the possibility of money laundering activity:

General

  • A secretive client: e.g., refuses to provide requested information without a reasonable explanation.
  • Concerns about the honesty, integrity, identity, or location of a client.
  • Illogical third-party transactions: 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 ubstantial sum in cash.
  • Significant overpayments by a client and the subsequent requests for refunds.
  • Absence of an obvious legitimate source of the funds.
  • Where, without reasonable explanation, the size, nature and frequency of transactions or instructions (or the size, location, or type of a client) is out of line with normal expectations.
  • A transaction without obvious legitimate purpose or which appears uneconomic, inefficient, or irrational.
  • Refunds following the cancellation or reversal of an earlier transaction.
  • Requests for release of client account details other than in the normal course of business.
  • Poor business records or internal accounting controls.
  • A previous transaction for the same client that has been, or should have been, reported to the MLRO.

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