Money laundering is exchanging money that was obtained illegally for money that is not illegal but is ‘clean’. The clean money does not have any link to criminal activity. Money laundering is an illegal activity.
Anti money laundering is a term that is used by businesses that fall within the financial law service to describe the measures that have been taken to stop this illegal activity.
Anti money laundering regulations (“AMLR”) is a term mainly used in the financial law services industry to describe legal controls that have been imposed upon financial law service providers and other regulated entities to prevent their systems being used by criminals and the duty imposed to report on any suspicious money laundering activities.
All businesses including solicitors providing financial law services that are covered by AMLR, have to put in place suitable anti-money laundering controls. Further all businesses covered by AMLR and providing financial law servicesmust be supervised by a supervisory authority. For solicitors, this would be the Law Society.
Today, most financial law service providers and many non-financial law service providers are required to identify and report transactions of a suspicious nature. For example, a solicitor must perform customer due diligence by verifying a customer’s identity and monitor transactions for suspicious activity. This is required, as providing financial law services, solicitors have a duty to protect themselves against any criminal activity by a launderer.
Customer due diligence means taking steps to identify customers and checking they are who they say they are. To do this, the following must be obtained from the customer:-
- Their full name
- Their passport or full UK driving licence
- A utility bill or bank statement that confirms their residential address
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