Money Laundering Regulations 2017—good practice for preventing money laundering and financing of terrorism
Money Laundering Regulations 2017—good practice for preventing money laundering and financing of terrorism

The following Practice Compliance guidance note provides comprehensive and up to date legal information covering:

  • Money Laundering Regulations 2017—good practice for preventing money laundering and financing of terrorism
  • Governance
  • Client/matter inception
  • Customer due diligence (CDD)
  • Source of funds and wealth
  • Training
  • Suspicious Activity Reports

This Practice Note provides examples of good practice in relation to the prevention of money laundering and financing of terrorism. The information in this Practice Note has been drawn from the most recent SRA Preventing Money Laundering and Financing of Terrorism thematic review, published in March 2018.

Governance

From 2018, many firms will be required to register Money Laundering Compliance Officers (MLCO) with the SRA. This is a new role and will be in addition to the nominated officer (Money Laundering Reporting Officer—MLRO). The MLCO will be at board level (or hold equivalent status) and will be responsible for anti-money laundering (AML) and counter-terrorist financing (CTF) compliance.

A strong AML and CTF culture reduces risk, aids compliance and protects reputation. You should seek to create an environment where staff are aware of their AML/CTF responsibilities and can understand and fulfil them. Building a strong AML/CTF culture involves several elements. Key strands include having a well-briefed, trained nominated officer and appropriate policies and procedures in place based on the firm’s risk assessment. These should be monitored, improved and enforced.

The nominated officer role is important and onerous so whoever takes the role should be prepared for it. Preparation could include:

  1. undertaking training

  2. serving as deputy nominated officer

  3. reading AML/CTF legislation and guidance

  4. joining an AML/CTF group

An effective nominated officer needs time to carry