Digital Anti-Money Laundering Check

Under previous regulations firms could automatically apply simplified customer due diligence under certain circumstances. However, under the new regulations, firms are also required to conduct a fully documented risk assessment. Exemption from enhanced due diligence is no longer automatic. A decision to apply simplified due diligence will need to be evidenced by a documented risk assessment, and all clients must be subject to Sanctions and Politically Exposed Persons (PEP) screening. Customer due diligence records must be kept and made available to regulators, and you must carry out on-going due diligence monitoring for all clients.

• You must be able to evidence that risk assessments are carried out and kept up-to-date, including clients, countries or geographic areas, products, services, relationships, transactions or delivery channels.
  
• Policies and procedures that take the firm's risk assessment into consideration must be implemented, and testing of these procedures carried out.
  
• You/your firm must arrange training of staff in risk assessments, customer due diligence and on-going due diligence. Compliance reporting and electronic hard copy records management must also be implemented.

Yes, the European Union’s Fourth Anti-Money Laundering Directive was implemented into UK law in 2017.

There are both regulatory and legal / criminal penalties for non-compliance. The Policing and Crime Act 2017 has increased fines up to £1,000,000 and increased prison sentences from two to seven years where ‘the person has breached a prohibition, or failed to comply with an obligation, that is imposed by or under financial sanctions legislation.’ (Policing and Crime Act 2017). Regulators, including the Solicitors Regulatory Authority and Financial Conduct Authority, may also impose penalties of their own.

Geodesys is a provider of AML Search, the UK standard in anti-money laundering customer due diligence screening. It's quick, simple and verifies the identity of your customers in real-time, giving you a clear indication of the level of risk.

The AML Search includes:

• improved electronic screening and risk assessment based on information collected from you during the order process.
  
• the ongoing retention, monitoring and disposal of data in accordance with new laws.
  
• an AML dashboard to assist you with the ongoing management and compliance of your AML procedures and automated alerts when data about an individual is found to be non-compliant at some point after the initial search.
  
• automated screening of sanctions, politically exposed persons (PEP) and alert lists.
• simplified and enhanced due diligence based upon an automated risk assessment.
• compliance reporting - AML Search monitors compliance of clients and the firm in real-time, with reports available to download.
  
• the option to choose either a simplified AML search (£3.00 inc VAT) or an enhanced AML search (£6.00 inc VAT), according to your risk assessment policy.

Please note that AML Search does not replace your current approach towards identity checks and due diligence, but is intended to compliment comprehensive record keeping relating to those actions.

As part of the new legislation you are required to register for the new AML products, even if you have purchased them from us previously.

This registration process should be carried out by your Money Laundering Officer (MLO) by entering your Information Commissioner's Office (ICO) reference number when prompted.

Colleagues covered by the same ICO number (please check your ICO number is the same, especially if you are from a different branch or 'sister' company) can then register too.

To register for AML, you need to input your company's ICO number.

Your Money Laundering Officer (MLO) should be aware of this number, but if not, you will have to contact the ICO their website.

We recommend simplified for family members, close friends, or regular clients. Enhanced should be used for everyone else.

Simplified due diligence is typically for ‘low risk’ work or transactions and requires:

• a risk assessment
• documentary evidence of the client’s identity and address
• electronic screening of financial sanctions, specially designated nationals and politically exposed persons.

Enhanced due diligence is typically for ‘medium and high risk’ work or transactions and requires all of the above, with the addition of:

• positive and negative verification of the client’s identity, date of birth and address.

• Multiple hard copy documentary evidence, including passport and driving licence
• Multiple confirmations of identity
• Multiple confirmations of address
• Multiple date of birth matching
• Multiple alert sources and financial sanctions files
• Politically Exposed Persons List (PEP)
• CIFAS (UK Fraud Prevention Service)
• Full electoral roll
• Bankruptcy records
• County Court Judgements
• Deceased checks
• Full financial records (shares data) checks
• Specially designated nationals file
• UK, European and US sanctions lists
• Financial Times shares index

Processing a Non-Personal  AML check is very straight forward.

1. You simply enter the company name, or the company registration number, or VAT number and a list of companies will be displayed.
2. Select the correct business to be checked and the process starts.  
3. The first phase checks and verifies that the company exists and provides detailed customer due diligence and 'Know Your Client' information.
4. The search also reveals shareholder and beneficial owner information and a list of public notices, and a summary of financial information, as well as the results of a sanction screening check on the business.
5. Not only that, but the system continues to monitor this information on a daily basis and advises you of any issues via the Alert functionality on your AML Dashboard.

As with Personal AML, there is both a simplified and an enhanced Non-Personal Search.

Essentially, the simplified search is a relatively simple ID check for companies. A check is run to prove the company’s existence as a valid company and that it is not listed on any sanctions lists.

Note that the simplified search will always result in an initially ‘non-compliant’ risk assessment, as information required for compliance with current AML legislation isn’t initially available with this type of search.

Therefore, the user should use the “Management Oversight” functionality within the AML dashboard to add the relevant missing details, or an acceptable narrative on the same, that caused the non-compliance (details of what was missing will be contained in the result) and then choose to move the company to “compliant”.  

The enhanced Search however, not only checks and reports on the sanctions lists but also tries to identify all the things required for the assessment to be compliant against current AML legislation - which includes:

• Ultimate Beneficial Owner(s) - the UBO of the organisation
• Controlling Parties - parties who have significant control over the organisation
• Representatives - individuals who are representing the organisation
• Officers or Equivalents - officers, directors or equivalents
• Shareholders - the organisation’s shareholders
• Structure - any identified parent or subsidiary companies

No specific documents are needed to get a compliant result for a non-personal search, i.e. you don’t have to provide anything for an electronic pass (other than the issue detailed above for a Simplified Search).

However any additional company documents such as confirmation statements, accounts information (AR’s), incorporation documents etc. can be provided  but these are purely for the purposes of additional documentary evidence, as these are all checked for their existence when the search is performed and highlighted in the filing history on the result.

If the Ultimate Beneficial Owner (UBO)  cannot be identified, or officers (generally, the Directors and/or Company Secretary) are not known, then the “Management Oversight” facility within the AML Dashboard would need to be used to add them. Finally, some form of letter from the company confirming ownership might be used in this instance, and if so should be uploaded at that time.

Pricing for the Non-personal AML product is the same as with Personal AML:

Simplified is £2.50 + VAT

Enhanced is £5 + VAT

It is recommended for anywhere where there is a risk involved. However for conveyancing you MUST do it in every instance. For example, if a client contacts you the day after you have carried out an AML search wishing to purchase a second property, a second AML search must be done. It is however, only required for 'Regulated' work (for example, work associated with wills do not need an AML check).

It is up to you but we recommend each person has an account they can use for AML searches. You can register for our website here.

The SRA states that AML cannot be described as disbursements in your advertisements. These elements should not be included as additional charges that are passed on to your clients. This includes, the costs of undertaking client due diligence, including identification checks for anti-money laundering purpose. However, if the costs are particularly high, for example an overseas company search, this cost may be charged to the client with client consent and explanation to the client of the likely cost.

You are not obliged to upload any documents, although you must tick a box to confirm that the information recorded and submitted (passport number etc) matches the documentation you have personally seen. We would, however, recommend you upload all documents.  

It is likely that the AML check will be returned as ‘referred’, meaning that the client cannot satisfy the risk criteria in terms of the number of positive results that are returned. In this case you will be required to make a decision to proceed based on your judgement.

This is down to your personal approach.