The FCA is the competent authority for supervising compliance of most credit and financial institutions with the Money Laundering Regulations.
Firms must put in place policies and procedures to prevent and detect money laundering. These include systems and controls to identify, assess and monitor money-laundering risk as well as customer due diligence (CDD) measures and monitoring to manage the risks identified. Firms must determine the extent of CDD measures and monitoring on a risk-sensitive basis depending on the type of customer, business relationship and product or transaction.
Firms must ensure that their systems and controls enable them to identify suspicious transactions. They are required under the Proceeds of Crime Act 2002 to submit a Suspicious Activity Report to the National Crime Agency where they know or suspect that a person is engaged in, or attempting, money laundering.
Firms must ensure that they are able to demonstrate the extent of their CDD measures is appropriate in view of the risks of money laundering and terrorist financing.
All firms who are subject to the AML rules must allocate overall responsibility for anti-money laundering systems and controls to a director or senior manager. They must also appoint a Money Laundering Reporting Officer (MLRO), who should act as a focal point for the firm’s anti-money laundering activity.
We expect all firms to ensure that their organisation and internal controls allow them effectively to monitor and manage the firm’s compliance with its AML policies and procedures.
Mortgage brokers, general insurers and general insurance brokers have to put in place systems and controls to prevent financial crime, which includes money laundering. Failure to have adequate systems and controls in place, for example, the absence of a process for reporting knowledge or suspicions of money laundering, put these firms and their employees at risk of committing money laundering offences. Many firms therefore choose to implement controls similar to those adopted by firms who are subject to the Money Laundering Regulations and the FSA’s AML rules.
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