Questions to ask about clients in connection with money laundering

The Money Laundering Regulations 2007 was introduced throughout the United Kingdom under the requirements of the EU's Third Money Laundering Directive.

Because of its history, the Scottish legal system is different from that of England and Wales in most respects but, as the money laundering regulations come about through the UK's membership of the EU, Scottish lawyers and other businesses come under the same legislation as the rest of the UK.

The regulatory body for solicitors in Scotland, The Law Society of Scotland, has useful information for members on its website which can apply equally well in the rest of the country.

It offers tips and advice on how to identify money laundering issues which may arise and says that most solicitors know instinctively when something feels wrong about a transaction but says if you are worried about a client or transaction, ask yourself the following questions:

Has there been any reluctance on behalf of the client to provide adequate ID?
A common theme among money laundering problems is endless promises to provide ID, which is then produced at the last minute and given little or no scrutiny.

Why has the client advised at a late stage that a third party will become involved in the transaction/provide the funds?
Both of these should be a concern.

Does the client appear to have a deep understanding of the money laundering regulations?
This is beginning to appear as a concern, on the simple principle that some criminals are very good at being criminals.

Is the client proposing a transaction that is unnecessarily complicated?
The stock explanation for complexity is that it is for "tax reasons". Ask to see the tax advice upon which the whole proposal is based.

The Law Society of Scotland advises that if you think something is not right during the course of a transaction you should raise your concerns with your money laundering reporting officer (MLRO). If you are the MLRO or unsure how to proceed, you can call the society's professional practice department on 0131 476 8124.

Anti-money laundering training from ML Solutions 4U
Setting up and maintaining compliant anti-money laundering systems in accordance with the Money Laundering Regulations 2007 is an onerous task. ML Solutions 4U can assist Money Laundering Reporting Officers develop and implement guidelines and policies as well as provide cost-effective client identification procedures and staff training.

Our anti-money laundering training seminars are accredited by the Law Society and count toward continuing professional development hours.

For an example of one of our techniques, visit our online anti-money laundering training module. Alternatively, simply complete our online enquiry form or call our team on 0845 402 0001 for more information about how we can help ensure your firm fully grasps the task of compliance with the Money Laundering Act 2007.

Money Laundering Information » Scottish Lawyers and the Money Laundering Regulations 2007