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Money laundering regulation

 

Anti-money laundering, counter-terrorism and financial sanctions legislation

Introduction

This section deals with anti-money laundering regulation alongside financial counter-terrorism and international sanction measures. These topics all concern managers of businesses and their advisers in relation to compliance with the law on making and receiving payments and monitoring business relationships.

International efforts at government level to combat money laundering go back more than thirty years. Legislative and enforcement measures were concerned initially with drug trafficking, but later extended to measures encompassing terrorist and general criminal activities. For businesses in the financial sector, regulations becomes ever more complex and burdensome.

For a more detailed overview of this subject, go to Money laundering regulation (AML). A summary of the development of legislation during this period is given in the section on historical development of AML laws.

Are you affected by AML?

All businesses (other than perhaps the smallest firms in the non-regulated sector) should have a basic awareness of AML laws. This is because some AML laws impose a duty if you merely suspect money laundering; and some counter-terrorist and all sanctions laws affect everyone.

What is the regulated sector?

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Stringent AML laws and regulations affect businesses in the financial sector.

In addition to the general money laundering offences, certain money laundering offences apply only in the regulated sector. The ‘regulated sector’ is defined in a complex set of definitions in POCA s.330/sched.9 but in brief includes (subject to certain exceptions):

* banks and credit institutions

* stock brokers and investment firms

* insurance companies and insurance intermediaries

* auditors, accounts, book-keepers, tax advisers

* real property dealers and estate agents

* trust or company formation and management

* legal or notarial services

* trading in goods for cash of at least 15,000 euros

* operating a casino

* auction platforms for emissions.

General legislation on anti-money laundering, counter-terrorism and financial sanctions includes::

* Proceeds of Crime Act 2002 which creates general money laundering offences applicable to all businesses;

* UK counter-terrorism and sanctions legislation; and

* Regulation (EC) No 1889/2005 on controls of cash entering or leaving the Community

Money laundering and anti-terrorist legislation in the regulated sector includes:

* Proceeds of Crime Act 2002 regarding specific offences applicable to businesses in the ‘regulated sector’;

* Money Laundering Regulations 2007: requires regulated businesses to carry out ‘customer due diligence’ including identity verification, monitoring of business relationships and source of funds. See the detailed page on the Money Laundering Regulations;

* EU Payments Regulation; and

* Counter-Terrorism Act 2008 directions

For further detail, see the more detailed overview: Money laundering regulation

[Page created: 08/09/2014]

 

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Money laundering regulation, counter-terrorism and financial sanctions