The Money Laundering Regulations 2003 part II

OBLIGATIONS ON PERSONS WHO CARRY ON RELEVANT BUSINESS Systems and training etc. to prevent money laundering

3'. —(1) Every person must in the course of relc\anl business carried on by him in Ihe United Kingdom -

1. comply with the requirements of regulations 4 (identification procedures). 6 (record keeping procedures) and 7 (internal reporting procedures):

2. establish such other procedures of internal control and communication as may be appropriate for the purposes of forestalling and preventing money laundering: and

1. take appropriate measures so thai relevant employees are -

(i) made aware of the provisions ofthc.se Regulations. Part 7 of the Proceeds of Crime Act 2002 (money

laundering) and sections 18 and 21A of the Terrorism Act 2000(24); and (ii) given training in how to recognise and deal with transactions which may be related to money laundering.

(2) A person who contravenes this regulation is guilty of an offence and liable -

1. oti conviction on indictment, w imprisonment for a term not exceeding 2 years, to a fine or ю boih:

2. on summary conviction, to a fine nol exceeding ihe statutory minimum.

Identification procedures

4. - (I) In this regulation and in regulations 5 lo 7 -

1. "A" means a person who carries on relevant business in ihe United Kingdom; and

2. "B" means an applicant for business.

(2) This regulation applies if-

1. A and В form, or agree lo form, a business relationship:

2. in respect of any one-off transaction

(i) A knows or suspects thai ihe ir.msaction involves money laundering: or (ii) payment of 15.000 euro or more is to be made by or to B; or

(c) in respect of two or more one-off transactions, it appears to A (whether at the outset or subsequently) iliat the transactions are linked and involve, in total, the payment of 15.000 curt) or more by or to B.

(3)A must maintain identification procedures which-

(a) require that as soon as is reasonably practicable after contact is first made between A and В -

(i) В must produce satisfactory evidence of his identity; or

(ii) such measures specified in the procedures must be taken in order to produce satisfactory evidence of В s identity;

2. take into account the greaicr potential for money laundering which arises when В is not physically present when being identified;

3. require that where satisfactory evidence of identity is nol obtained, the business relationship or one-off iransaction must not proceed any further; and

4. require that where В acts or appears to act for another person, reasonable measures must be taken for the purpose of establishing Ihe identity of thai person.

(5) In proceedings against any person for an offence under this regulation, it is a defence for that person to show-thai he took all reasonable steps and exercised all due diligence to avoid committing ihe offence.

Regulation 7

Internal reporting procedures

(DA must maintain internal reporting procedures which require that -

(a) a person in As organisation is nominated to receive disclosures under this regulation ("the nominated officer") Note: Headings in the above document appear in bold in the original statutory instrument. Professional English in Use Law

' 5.1 Complete the definitions. Look at A opposite to help you.

1 - process by which finance obtained through crime is used in

such a way that it appears to originate from a legitimate source

2 .- - a business activity nor carried our in rhe course of

an existing business relationship

3 - anticipating and hindering

quickly as possible

5 - took every care and carried out

required procedures

6 - confidential information made public

5.2 Replace the underlined words and phrases in the memo below with alternative words and phrases from A opposite. Pay attention to the grammatical context.

BRIDGEMAN BANKS - INTERNAL MEMORANDUM To: All Partners and Fee Earners Date: 23 April 2007

From: Peter O'Donnell Subject: Money laundering procedures

You will no doubt be aware of the serious implications for legal firms and their employees of failing to (1) observe the (2) Profits from Crime Act and the Money Laundering Regulations. Given that it is possible to become unintentionally involved in a money laundering transaction in the course of, for example, a property purchase, or in a situation where you (3) carry out activities on behalf of someone else, the firm is anxious to put in place systems and to provide training to ensure that there are effective procedures so that employees do not risk (4) breaking the regulation. The penalties following criminal prosecution and conviction may comprise imprisonment and a (5) money penalty. We need to be able to demonstrate that we (6) did what was possible and (7) carried out all formal requirements to avoid committing an offence. The main offences under the current legislation are:

* Not (8) hindering or preventing a money laundering arrangement

► Not making a (9) statement if you know or (10) guess money laundering

* Prejudicing an investigation, for example by tipping off a suspect Evidence of identity

As you know, the precedent form of the Client Care letter for new clients and the firm's standard terms of business contain information to make clients (11) conscious of our obligations under the legislation. An important part of our procedures is the requirement to produce (12) sufficient proof of identity from new clients as soon as is reasonably practicable. Obviously there are different requirements (for example, appearance in person, passport, driving licence, etc.) for different types of client and the relevant guidance is set out in the Office Manual. What to do if you are suspicious - internal reporting procedures

I am the firm's (13) named Money Laundering Reporting Officer. If you have any suspicions at all, either about a particular client or any aspect of a (14) business activity, please feel free to contact me. If I think we need to refer the matter to the National Criminal Intelligence Service, it is extremely unlikely we will be able to inform the client - this can amount to tipping off. If NCIS decides to investigate, we will have to terminate our retainer with the client.

Over +o upu

Explain how money laundering is dealt with in a jurisdiction you are familiar with, as if to a foreign colleague.

To see the Money Laundering Regulations 2003 and Proceeds of Crime Act 2002, go to: www.opsi.gov.uk/acts.htm

Client correspondence

Client correspondence

Conciseness can be a feature of legal correspondence in English. This is partly achieved by using words or phrases to refer to segments of earlier text (substitution) or by not completing a phrase and omitting words (ellipsis), assuming the reader can recover the meaning from the preceding text. Another feature of legal text is the use of capitals mid-sentence for key terms which may be defined or interpreted elsewhere in the text or in another document. The letter below is from a sequence of correspondence between a solicitor and his client. It concerns the final stages of the purchase of a company.

JENKINS WATSON

Strictly Private and Confidential

Mr G Slobbard

Managing Director aep/2122-1KM

Lincoln James Limited bncl/,