Appendix 1
Where you know or suspect or have reasonable grounds to know or suspect that a money laundering activity is taking place or has taken place, you must notify the Money Laundering Reporting Officer immediately using the money laundering reporting form.
Money laundering reporting form
Appendix 2
Potential money laundering activity
It is impossible to give a definitive list of ways in which to spot money laundering; however, one or more of the following may suggest money laundering activity (not an exhaustive list):
General
- A secretive client e.g., refuses to provide requested information without a reasonable explanation;
- Concerns about honesty, integrity, identity or location of a client;
- Illogical third party transactions e.g. unnecessary routing or receipt of funds from third parties or through third party accounts;
- Involvement of an unconnected third party without logical reason or explanation;
- Payment of a substantial sum in cash;
- Overpayments by a client;
- Absence of an obvious legitimate source of the funds;
- Where, without reasonable explanation, the size, nature and frequency of transactions of instructions (or the size, location or type of a client) is out of line with normal expectations;
- A transaction without obvious legitimate purpose or which appears uneconomic, inefficient or irrational;
- The cancellation or reversal of an earlier transaction;
- Requests for release of client account details other than in the normal course of business;
- Poor business records or internal accounting controls;
- A previous transaction for the same client, which has been, or should have been and was not, reported to the Money Laundering Reporting Officer;
- Complaints about a customer that raise suspicions of criminal activity / money laundering; and
- Items in a customer’s home that raise suspicions / seem out of the norm (e.g. several new boxed televisions).
Property matters
- A cash buyer
- A sudden change of buyer
- Unusual property investment transactions if there is no apparent investment purpose or rationale
- Instructions to receive and pay out money where there is no linked substantive property transaction involved (surrogate banking)
- Funds received for deposits, or prior to completion from an unexpected source or where instructions were given for settlement funds to be paid to an unexpected destination
- No clear explanation as to the source of funds along with lack of clarity as to how the client would be in a position to finance the purchase; and
- Money comes from an unexpected source.
In the case of Norwich City Council, some areas likely to be at risk of encountering money laundering may be (not an exhaustive list):
- Right to Buy (e.g., tenant able to pay for the purchase of their house in cash);
- Housing Rents, Council Tax, Non-Domestic Rates (e.g., customer able to pay large sums that are either in arrears, or in advance, in cash); and
- Land Purchase (e.g., an individual is able to purchase land from the Council in cash).
- Sundry Debtors (e.g., an individual is able to clear their account with large amounts of cash)
Money laundering offences
The consequences of committing an offence are potentially very serious. Whilst it is considered most unlikely that staff or Members would commit any of the four main offences, failing to reveal a suspicion of a case of money laundering is a serious offence in itself.
Money laundering offences can be tried at a Magistrates court or in the Crown Court, depending on the severity of the suspected offence. If someone is found guilty in a Magistrates court, s/he can be fined, face a prison sentence, or both. In a Crown Court, fines are unlimited and prison sentences range from two to fourteen years.
The main money laundering offences are:
Concealing – where someone knows or suspects a case of money laundering but conceals or disguises its existence.
Arranging – where someone involves himself or herself in an arrangement to assist in money laundering.
Acquisition /use/possession – where someone tries to benefit from money laundering by acquiring, using or possessing the item concerned.
Tipping off – where someone warns a person who is, or is suspected of being, involved in money laundering in such a way as to reduce the chance that s/he will be investigated or to prejudice an investigation.
So, if you have any suspicions complete the attached form and report it to the MLRO without discussing it with anyone else.
