Are Your Anti-Money Laundering Procedures Compliant?
It might be thought by many that money laundering is an esoteric crime that is practised only by professionals in positions of authority or influence, but this is not so. Money laundering supports terrorism, drug dealing and other unlawful activities and, accordingly, the law relating to it is comprehensive and strict. For example, those who deal in high value goods are obliged by law to have appropriate anti-money laundering procedures and to enforce them.
In a recent case, an alcohol wholesaler was fined thousands of pounds for breaching the Money Laundering Regulations 2007. The wholesaler was required by the Regulations to vet customers carefully and to notify the authorities of any potentially suspicious transactions. It was investigated by HM Revenue and Customs (HMRC) after it entered into substantial cash deals with overseas buyers. It was fined £5,000, the maximum available where a gross profit is less than £50,000, on the basis that the transactions were unusual enough to have put a reasonable person on inquiry and that its monitoring of deals and customer due diligence measures were inadequate.
In ruling on the wholesaler's challenge to the fine, the First-tier Tribunal (FTT) found that it had shown no proper appreciation of the need to deter, detect and disrupt money laundering activities. The relevant transactions were high risk and no effective precautions had been taken, or even really contemplated. The FTT nevertheless halved the fine to £2,500 on the basis that the failures to comply with the Regulations were not deliberate.