Protect your Firm against Money Laundering
February 21 2023 - Money laundering is a big problem in the UK. The National Crime Agency believes that the overall cost of the practice is in excess of £37 billion - which benefits 4,542 organised crime groups. These figures are likely both underestimates, since they don't account for the money laundering operations that no one in authority has any knowledge of.
If your business handles money, then you mustn't be unwittingly drawn into a money laundering operation. This is a problem that's best tackled proactively, since failure to do so might lead to legal and reputational issues.
Registering with an AML Program
If your business is in the financial sector, you might need to register with something called an anti-money laundering (or AML) program. This applies to accountants, letting agents, casinos, and even art dealerships. If you're handling large amounts of cash and you aren't sure where it's come from, then you could be targeted by money launderers.
If you're unsure of whether you're required to register, or how to register, then it might be an idea to consult with an expert third-party. This is where a reputable law firm can help you to prevent disaster.
When dealing with any third party, it's worth taking measures to ensure that they are who they say they are, and that the money they're giving you has come from a legitimate source. This might mean conducting a risk assessment, and screening any names against lists of known international criminals. If you don't take reasonable steps to make life difficult for money launderers, then you might well be viewed as complicit in their activities.
Transparency should be baked into your cash-handling procedures. There should be a record of every transaction, and you should regularly hold meetings to examine your accounts. It might also be worth bringing in a third-party auditor to examine your finances, and suggest where vulnerabilities might be dealt with.
Modern businesses have access to a range of technologies which might help to deal with money laundering attempted. For example, many major banks are now using machine learning and artificial intelligence to flag potentially suspicious transactions. This helps to eliminate the problems with false positives associated with more traditional automated systems.
An artificial intelligence can spot complex patterns of behaviour, rather than looking at simple criteria, like the location and value of a transaction. As such, they tend to produce results that don't need to be laboriously corrected by human beings.
Of course, cybercriminals also have access to sophisticated means of avoiding detection, and of laundering money through digital means. The involvement of certain kinds of cyptocurrency, and other digital assets, might be treated as a red flag.