Financial Crime World

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Preventing Money Laundering in Financial Services

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Introduction

This guide provides a framework for preventing money laundering in financial services. Money laundering refers to the process of disguising the origin of illicitly obtained funds.

Key Points

  • The guide aims to provide a framework for preventing money laundering in financial services.
  • Retail schemes directed at the public are particularly vulnerable to money laundering.
  • Financial institutions dealing directly with the public may be used for the initial disposal of cash proceeds derived from crime.

The Threat Posed by Money Laundering

Vulnerable Sectors

  • Retail schemes directed at the public are particularly vulnerable to money laundering.
  • Financial institutions dealing directly with the public may be used for the initial disposal of cash proceeds derived from crime.
  • Offshore businesses accepting cash are at risk of being involved in money laundering.

Scope of the Guidelines

Covered Services

The guide applies to “Financial Services Providers” who provide various services, including:

  • Banking business
  • Financial business
  • Venture capital
  • Money transmission services
  • Issuing and administering means of payment (e.g., credit cards)
  • Guarantees and commitments
  • Trading for own account or for customers in money market instruments, foreign exchange, etc.

Relevant Transactions

Relevant financial transactions involve the provision of these services.

The Money Laundering Legislation

Key Laws

The legislation specifically relating to money laundering is contained in:

  • The Money Laundering Prevention Act (2011)
  • The Proceeds of Crime Act (1993)

See Appendix 1 for definitions and offenses.

Key Takeaways

  • Financial institutions have a responsibility to prevent money laundering and must implement measures to detect and report suspicious transactions.
  • The guide provides a framework for assessing whether or not the guidelines apply to business undertaken.
  • Care and diligence must be exercised in assessing whether or not the guidelines apply to business relationships.
  • An isolated transaction should be treated as any other transaction, but identity verification and reporting may be required if money laundering is suspected.