Money laundering – how vulnerable are you?

To most people money laundering is something we are familiar with due to TV shows such as Breaking Bad, Power and The Ozarks.  While they do bring it into the public eye, how many of us are aware of the risks and ensure that we do not fall foul of criminals trying to clean their illicit funds through legitimate businesses? And it is not just drug gangs and cartels either, money laundering now contributes to terrorism.

For accountants, being aware of and up to date with anti-money laundering regulations is a standard part of the day-to-day running of a practice, but if you are running a business, are you aware of the risks, the regulations and the steps you can take to make it less attractive for criminals to target you? If you run a business, which is viewed as cash intensive, you could be at a high risk without even knowing it.

Even if you are an innocent party, you could still receive a substantial penalty if money has been cleaned through your business on your watch.  This also applies if you are working in conjunction with others or have partners within your firm, you must exercise due diligence over their conduct to safeguard yourself and your business activities. If you are in finance where you are required to act on behalf of Companies, possibly transferring money you need to be considering some of the following questions:

1. Have assets appeared suddenly or has somebody floated the idea of making a loss?
2. Have there been sudden changes to your working relationship with partners or other businesses?
3. Has someone been vague or reluctant to talk about the exact sums of money involved in a deal, or who the investors are?

As mentioned previously, we can often feel removed from money laundering because of its movie and TV status, it’s easy to think it’s beyond the realm of the standard business owner, thinking we are too small for criminals to target us.  But sometimes your ‘normal’ status can be the very thing that will draw the criminals in.  Remember, criminals will be looking for a ‘front’ that would not be suspected by the authorities.  So, how can you safeguard yourself against it?

Do you handle cash?

• Enforce a limit on cash payments
• Have a second person to sign off cash payments of a higher amount

Do you know who someone is?

• Take the time to carry out ID checks

Do you have cash handling procedures?

• Put procedures in place for all personnel so that it is made difficult for money laundering to occur

Do you have a money laundering policy?

• Get one written, ensuring all employees are aware of what it is and in what way your business could be vulnerable
• Implement and carry out ongoing training.  Even a receptionist needs to know if they overhear or see something that brings a concern to their attention.

If you become aware of a money laundering issue, it is your responsibility to report this – whether to a Money Laundering Officer or SOCA (Serious Organised Crime Agency).  Remember if you do – do not make the client aware of your report, this can be seen as tipping off!

If you think that you may be vulnerable to money laundering, Avanti can assist you with carrying out anti-money laundering checks.  Call us today to see how we can help you minimise risk (08000) 388 799.

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