What types of transactions are covered?
The Money Laundering Regulations apply to all cash and monetary transactions. The Proceeds of Crime Act applies to all transactions and can include dealing with agents, third parties, property or equipment, cheques, cash or bank transfers.
In the context of the College, activities such as the payment of fees by students, gifts and donations, or agreements and contracts with commercial organisations may fall within the legislation.
The following types of risks, either alone or collectively, could indicate the possibility of money laundering (especially, but not exclusively where the College deals with new customers, business partners or sponsors):
- Payments in cash in excess of 10,000 Euros (approximately £9,000) where the payer fails to provide proper evidence to confirm their identity and address;
- A secretive person or business who refuses to or delays in giving requested information - examples may include invoices that exclude VAT, fail to quote a VAT number or invoices issued by a limited company that lack the company’s registered office and number;
- Concerns about the honesty, integrity, identity or location of individuals or businesses;
- Involvement of an unconnected party in a transaction for no obvious reason;
- Applications from high risk countries. A list of high risk and non-cooperative jurisdictions can be found on The Financial Action Task Force (FATF) website; http://www.fatf-gafi.org/) – additionally, a consolidated list of targets of financial sanctions is published by HM Treasury on https://www.gov.uk/government/collections/financial-sanctions-regime-specific-consolidated-lists-and-releases and US Department of Treasury on https://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx[DAH1] ;
- Request for cancellation or reversal of funds or requests for refunds (particularly to a different account or individual to the payer) i.e. “circular transactions”, where a payment to the College is followed by an attempt to obtain a refund from the College;
- Absence of a legitimate source of funds;
- Unusual or unexpected large payments or overpayments;
- A potential supplier submits a very low quotation or tender (the risk being that the supplier business may be subsidised by the proceeds of crime with the aim of seeking payment from the College in “clean” money;
- Agents who do not fit in with normal procedures relating to deposits and tuition fees;
- Identity fraud;
- Requests for account details outside the normal course of business; and
- Poor business records, controls or inconsistent dealings.