The Money Laundering Regulations 2007
This page provides an introduction to the Money Laundering Regulations 2007 and how they affect interim managers and users of interim services.
The Money Laundering Regulations 2007 (“the Regulations”) came into force on the 15th December 2007 and replace the Money Laundering Regulations 2003. The Regulations and their predecessor form one arm of the Government's strategy against crime and terrorism which aims to restrict criminal access to the financial system and in particular the act of turning money from illegitimate sources into legitimate funds - known as “money laundering.” The Regulations supplement the Proceeds of Crime Act 2002 and the Terrorism Act 2000, which impose obligations on firms and individuals to report any suspicions of money laundering or terrorist financing.
The Regulations put more detailed obligations on firms within their scope to carry out 'customer due diligence'. As well as requirements for firms to put measures in place to verify their customers' identity, firms must also undertake ongoing monitoring of their business relationships and identify beneficial owners of the customer. Firms are required to vary the customer due diligence requirements and monitoring according to the risk of money laundering or terrorist financing and are required to undertake enhanced customer due diligence measures in high risk situations. There are also requirements on firms to train their staff on the requirements of the Regulations.
Under the regulations, anyone who carries on 'relevant business' in the UK as part of a business relationship, or is involved in a one off transaction that exceeds the sum of £10,400 (€15,000) must follow strict procedures and security checks to ensure they are not assisting money laundering. These include obligations to set in place:
- Procedures and training for employees involved in transactions that may involve money laundering
- Identity checks on clients
- Procedures in respect of record-keeping for identifications obtained and transactions carried out, and
- Internal reporting procedures in the event of any suspicions aroused.
A failure to meet the standards required by the Regulations is an offence punishable by up to two years in prison and/or a fine.
Those firms within the scope of the Regulations need to be aware of their obligations under the Regulations and take steps to implement the measures required of them. Those who fail to comply with the requirements will be liable to a fine or imprisonment of up to two years or both. In addition, those firms who fall within any of the categories of firms to be supervised by HMRC must take urgent steps to ensure that they comply with their obligations to register.
What does this mean for interim managers?
Interim managers must simply follow the law as laid out above when receiving payments for their contract. They should also follow relevant company policy if involved in transactions of this level when on contract within an organisation.
What does this mean for hirers?
Organisations are likely to have processes and policies in place which will cover these regulations. They are responsible for ensuring that interim managers are informed of any such policies.
Alium Partners Limited falls within the scope of the Regulations and is taking the necessary steps to implement the measures required of us by the Regulations.
Where can I find out more?
See the guidance published by HMRC.
The contents of this article are intended for general information purposes only and shall not be deemed to be or constitute legal advice. The summaries represent our understanding of the law as at November 14th 2007 and it is subject to change at any time. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.
My assignment was set up and managed throughout in a highly professional manner.
Programme Director, Royal Berkshire NHS Foundation Trust
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