The Essentials Of AML Guidance For Legal Practitioners
- Datalaw Admin
- Jun 17, 2019
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The AML guidance is basic rules and regulations stipulated to guide and control legal practitioners when it comes to the issue of handling money and every other financial involvement. These guidelines apply across all legal sectors: a sole practitioner, an authorised entity, an independent legal professional business, a solicitor, and a law firm. Barrister and advocates are also guided by some not all of the anti-money laundering compliance policy. For example, the MLRO ( money laundering reporting officer) rules and organisational arrangements do not apply to advocates and barristers practising from chambers or as a sole practitioner but will apply to advocates and barristers working in private practice in entities. Money laundering is a serious threat to society, resulting in a loss of revenue and a threat to life, even fueling other criminal activities. The AML rules and guidelines are geared towards assisting independent legal professionals in meeting up with their obligations as stated in the AML compliance policy ( soon to be unveiled). Money laundering also involves changing false proceeds to say of a crime into a legitimate proceeds, it can also be in the form of small profits gotten from relatively minor crimes; minor tax evasion, regulatory breaches. Money laundering can also take the form of :
« Placement: this involves putting a cash generated from crime into a financial system when at the risk of detection, since these systems ( banks) have developed AML procedures.
« Integration: this done after the source of an illegitimate fund have been obscured, by investing such funds into legitimate business and investment such as a property under the supervision of a legal professional, settling up a trust, acquiring a company or even used in settling litigation.
« Layering: this involves obscuring the sources of illegitimate funds by passing them through complex transaction such as passing it through multiple jurisdictions.
Some of the essentials of the anti-money laundering policy and regulations in conjunction with the FATF( financial action task force) include:
ü Imposition of limitations on the amount of payment that can be made or accepted from a customer- this helps to restrict the amount that can be deposited by an individual in cases of no transaction deal.
ü Reporting of international transfer of the exorbitant amount of funds and security: this report is to contain the name, addresses of the sender and receiver so as to curb cases of falsification of details during financial transactions of the individuals involved, such individuals are liable to forfeiting a high percentage of such funds or even imprisonment.
ü Detailed identification of customers: the KYC ( get to know your customers) policy is one of the essential guidance in AML policy and regulation, hence any financial system has to verify its customers and update all relevant information about the customer from time to time, scrutinize on a regular basis on-going financial transactions of the customer, taking appropriate measures to understand the customer ownership structure, the use of necessary risk procedures and system.
ü Special surveillance on certain transaction especially if such transactions involves a frequency which is unjustifiable, conditions of usual complexity, lacking a lawful objective, all these and others can be deemed as suspicious.
ü Preservation of records: the AML guidance and regulations requires that financial system and designated non-financial system to preserve all financial records with the appropriate and authorised department, the records of all customers details store be taken and kept for at least 5 years after the customer accounts have been closed
ü Communication of information: the AML guidance and regulations for legal practitioners, MLRO's requires that any information about a customer who is involve in money laundering should be provided and communicated to the relevant higher authorities responsible for the prosecution of such fraudulent acts.
ü Creating and arousing of awareness among employees of a financial system.
These and other rules and guidelines are prepared to aid cases of money laundering which is so prevalent in financial bodies and institutions. They are formulated as a guide to all legal practitioners involved in cases of money laundering either within or In an indirect form, the MLRO', practice manager, law firm and a host of other legal bodies overseeing case of money laundering so that it can be well handled and sought out.