Understanding and addressing the impact of money laundering

Juggling challenging schedules and trying to provide the best possible service to clients means there can be little time spare to think about money laundering.

We’d encourage you all though to take a moment to consider the potential consequences of money-laundering upon your job, the economy, and wider societal harms..

• The consequences of being personally involved – wittingly or unwittingly – can be severe. Financial penalties, loss of license and criminal sanctions including prison time should certainly sharpen the mind when it comes to being vigilant about the risks posed by both new and existing clients. 
• Involvement in money laundering can also have serious knock-on reputational and professional costs. (Accountants/Solicitors) are in a position of great trust, and any perception that they are providing legitimacy to the proceeds of crime can damage the profession.
• Most importantly, the ripple effect of money laundering actively damages communities, as well as the economy. Serious and organised crime costs the UK an estimated £24bn each year, and destroys lives.  Money laundering enables criminals to profit from the trafficking of humans, drugs and weapons, and can even facilitate terrorist activity. It isn’t a victimless crime.  

Ultimately, the vast majority of (accountants/solicitors) want to do the right thing to protect themselves and their profession. It’s not worth the risk to overlook discrepancies, no matter how minor they may seem. Undertaking effective due diligence throughout the life cycle of a client relationship, and flagging suspicion by submitting a Suspicious Activity Report (SAR) if you encounter any red flags are significant steps towards tackling money laundering in the UK.

Liz Baker, Head of Proceeds of Crime Division, Serious Fraud Office, said: “Due diligence isn’t just about ticking a number of boxes. It’s about taking a step back from the boxes and asking yourself some very sensible questions such as: does the underlying rationale for this arrangement make sense? If you’ve carried out proper, careful due diligence then you will survive a regulatory inquiry. If you haven’t, you run the risk that either you personally, or your firm, or both, will be at the wrong end of an inquiry which could result in professional sanctions, and potentially monetary sanctions as well.”

For more guidance on anti-money laundering best practice and SARs reporting, click here or look on the National Crime Agency website.

This article has been posted in support of the campaign by the Home Office, National Crime Agency and Accountancy Affinity Group to highlight the threat from money-laundering and provide best practice advice and guidance on risk-based due diligence.