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Money Laundering Regulations

1. What is money laundering?


Money laundering is exchanging criminally obtained money or other assets for 'clean' money or other assets with no obvious link to their criminal origins. It also covers money, however come by, which is used to fund terrorism.

2. Why does the UK have money laundering regulations?


The Money Laundering Regulations 2007 implement the EC Third Money Laundering Directive in the UK. Both of these pieces of legislation reflect the recommendations of the international Financial Action Task Force which was set up to tackle money laundering on a worldwide basis.

The Money Laundering Regulations play a crucial role in safeguarding the UK financial system from organised criminals and terrorists.

3. When did the new Regulations start?


The new regulations came into effect on 15 December 2007 and replaced the 2003 regulations. All relevant businesses must have appropriate anti-money laundering systems in place.

4. How do the Anti Money Laundering Regulations affect The Company Wizard and our clients?


The regulations clearly state that they apply to persons acting in the course of business within the UK for the following areas-
  • credit institutions
  • financial institutions
  • auditors, insolvency practitioners, external accountants and tax advisers
  • independent legal professionals
  • trust or company service providers
  • estate agents
  • high value dealers
  • casinos

This directly affects The Company Wizard as a "Trust or Company Service Provider" refers to a firm or sole practitioner who by way of business provides any of the following services to other persons-
  • forming companies or other legal persons;
  • acting, or arranging for another person to act
    (i) as a director or secretary of a company;
    (ii) as a partner of a partnership; or
    (iii) in a similar position in relation to other legal persons;
  • providing a registered office, business address, correspondence or administrative address or other related services for a company, partnership or any other legal person or arrangement;
  • acting, or arranging for another person to act, as
    (i) a trustee of an express trust or similar legal arrangement; or
    (ii) a nominee shareholder for a person other than a company whose securities are listed on a regulated market

5. What is Client Due Diligence?


The Company Wizard is a regulated company that have installed methods of verification to ensure that all ongoing business relations are suitably validated for Money Laundering Purposes. The customer due diligence we carry out is designed to identify our customer and to ensure that any suspicious activity is reported through the correct channels.

Where there is deemed to be an ongoing business relationship with The Company Wizard we will be asking such clients to provide further information and documentation to validate their identity. Failure to provide such information in a suitable timeframe will mean that we are legally obligated to suspend any future business activity with this client.

6. Verifying your Identity with Company Wizard


There are a number of methods that we may use to verify you for Money Laundering purposes. The traditional approach is to request two pieces of documentation that will individually confirm your identity and your address. Please refer to section 7 for a list of acceptable documents. This information can be emailed, posted or faxed to our office.

The second approach we may use will allow us to electronically identify you through your name, address and date of birth. This method will crosscheck your details against a large number of data sources e.g. European Union, the PEP, Bank of England, Land Registry, CIA and various other public sources. Using the electronic method enables us to obtain a risk based score from 0 to 100. Should we not be able to obtain a satisfactory outcome from this method then we will revert to the traditional method as previously described.

7. Examples of Risk Based Verification


The following table illustrates the types of identification that may be used for Money Laundering Validation. The client will be required to supply one piece of information from each column.

Sources of Evidence

List 1:Acceptable photo identity
  • valid passport; or
  • valid photocard driving licence (full or provisional); or
  • national identity card (non-UK nationals issued by EEA member states and Switzerland); or
  • firearms certificate or shotgun licence; or
  • identity card issued by the Electoral Office for Northern Ireland

Acceptable non-photo evidence of identity:

Documents issued by a government department, incorporating the person's name and residential address or their date of birth, eg:
  • a current UK full drivinf licence old version (not provisional licenses); or
  • evidence of entitlement to a state or local authority funded benefit(including housing benefit and council tax benefit), tax credit, pension, educational or other grant; or
  • documents issued by HMRC, such as PAYE coding notices and statements of account (NB: employer issued documents such as P60s are not acceptable); or
  • end of year tax deduction certificates.

List 2:Evidence of address or date of birth
  • instrument of a court appointment (such as a grant of probate, bankruptcy); or
  • current council tax demand letter or statement; or
  • current (within the last 3 months) bank statements, or credit/debit card statements issued by a regulated financial sector firm in the UK, EU or JMSLG equivilent jurisdiction (but not those printed off the internet); or
  • a file note of a visit by a member of the firm to the address concerned ("home visit"); or
  • an electoral register search showing residence in the current or most recent electoral year (can be done via a 192 Search); or
  • a recent (last available) utility bill (gas, water, electricity, telephone - not mobile phone bills); it must be a bill or statment of account (not correspondence); or
  • valid photocard driving licence (full or provisional); or
  • a current UK full driving licence old version (not provisional licences); or
  • evidence of entitlement to a state or local authority funded benefit(including housing benefit and council tax benefit), tax credit, pension, educational or other grant; or
  • documents issued by HMRC, such as PAYE coding notices and statements of account (NB: employer issued documents such as P60s are not acceptable); or
  • a firearms or shotgun certificate; or
  • a solicitor's letter confirming recent house purchase or Land Registry confirmation (you must also verify the previous address).
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