Click here to learn more about our revolutionary app or download directly from one of the sources below.
Money laundering is essential for criminal organisations that wish to use illegally obtained money effectively. Dealing in large amounts of illegal cash is inefficient and dangerous. Criminals need a way to deposit the money in legitimate financial institutions, yet they can only do so if it appears to come from legitimate sources.
This is the process of ‘washing’ dirty money.
The process of laundering money typically involves three steps: placement, layering, and integration.
The Proceeds of Crimes Act 2002 (POCA) is the main statute dealing with money laundering. It defines a range of offences as including all forms of handling or possessing criminal property, including possessing the proceeds of a person’s own crime, and facilitating any handling or possession of criminal property.
There are many ways to launder money, from the simple to the very complex.
One of the most common techniques is to use a legitimate, cash-based business owned by a criminal organisation. For example, if the organisation owns a restaurant, it might inflate the daily cash receipts to funnel illegal cash through the restaurant and into the restaurant’s bank account. After that, the funds can be withdrawn as needed.
These types of businesses are often referred to as ‘fronts.’ As a member of the .nancial industry, an insolvency professional has an obligation to check for money laundering when taking on a new case or client.
This is why an Insolvency Practitioner (IP) will undertake client due diligence.
For an individual, the IP will need to check their identity. Standard practice is one document as proof of name, (such as a passport or driving licence) and two documents as proof of address (such as a utility bill, bank statement or council tax statement).
For a company, the IP must identify the ultimate beneficial owner. This is the person who has ultimate control over the company and will likely be the majority shareholder.
If the IP suspects there has been any money laundering, they must report it internally to the appointed Money Laundering Reporting Officer (MLRO)…
