1. ANTI MONEY LAUNDERING & Bribery AWARENESS
An overview

2. Objectives
Understand what Money Laundering is and your obligations under the Money Laundering Regulations 2007
How to identify and report Suspicious Activity
Understand the need to conduct Customer Due Diligence and an introduction to the Retail Client AML Requirements which can be found on the extranet
Understand offences of Bribery under the Bribery Act
Introduction to Intrinsic Gifts and Entertainment policy and your obligations

3. Content What is Money Laundering The three stages of Money Laundering
What is Suspicious Activity and how to recognise it
The Suspicious Activity Reporting Process
Money Laundering Offences
Customer Due Diligence
Bribery & Conflicts of Interest
Gifts and Entertainment
Summary and next steps

4. What is money laundering
Money laundering occurs every time a transaction takes place or a relationship is formed that involves any form of property from any crime
It includes money or assets obtained criminally which are exchanged for money or assets that are ‘clean’, with no obvious link to any criminal activity
This process typically involves three key stages known as:
Placement
Layering
Integration

5. The three stages of money laundering
PLACEMENT
LAYERING
INTEGRATION
Where cash from criminal activity is placed into the financial system
Usually involves a complex system of transactions designed to hide the source and ownership of the funds and confuse the authorities
Where laundered funds are reintroduced into the legitimate economy, appearing to have come from a legitimate source

6. UK regulatory framework
The laws, rules and guidance relating to anti money laundering in the UK is made of up of:
Primary legislation
Proceeds of Crime Act 2002 (POCA)
Secondary legislation
Money Laundering Regulations 2007 (MLR)
Industry and Professional Guidance
Guidance notes, e.g. Joint money Laundering Steering Group (JMLSG)
Regulator/Supervisory Rules and Enforcement
Financial Conduct Authority Systems & Controls (SYSC) Source Book
Her Majesty’s Revenue & Customs (HMRC)
Law Society
Office of Fair Trading (OFT) (Estate Agents)
Gambling Commission (Casinos)

7. Your obligations
Although you don’t need to memorise the AML legislation, you are expected to understand what your obligations are as a result of it
You need to know that Steve Elliot is Intrinsic’s Money Laundering Reporting Officer (MLRO)
You need to understand how to recognise suspicious activity and know how to make a report

8. What is suspicious activity?
Fraud
An act of deception intended for personal gain or to cause a loss to another party
Identity Theft
When someone takes another person’s identity to perform fraud or other criminal act
Tax Evasion
Often entails taxpayers deliberately misrepresenting the true state of their affairs to the tax authorities to reduce their tax liability
It includes dishonest tax reporting, such as declaring less income, profits or gains than the amounts actually earned, or overstating deductions

9. What is suspicious activity?
Large amounts of money
Coming from or to a high risk country and no reasonable explanation; for example the client claims the money is from the sale of a property but can provide no documentation to support this
Benefit Fraud
When someone obtains state benefit they are not entitled to, or deliberately fails to report a change in their personal circumstances
Money Laundering
Concealing the proceeds of crime; for example a customer who starts investing large amounts of money however not in keeping with client circumstances and investment history
Remember - any transaction – any relationship - any property - any crime

10. How to recognise Suspicious Activity
Money Laundering activity is usually noticed where:
There is no legitimate reason for the relationship; e.g. the client is based in a different area and contacts you out of the blue
The behaviour of the client is suspicious, e.g. a client puts great pressure on you to follow their instructions without providing you with all the answers that you need
There is unusual or irregular activity compared with what you know about:
Any previous dealings with the client
their circumstances
the reason for the relationship
e.g. the client all of a sudden has a large amount of money to invest but it is not in keeping with their current income and expenditure
If you determine that an activity may be suspicious you should report it immediately - using the Suspicious Activity Reporting (SAR) process

11. Suspicious activity reporting (SAR) process
You can find the SAR process in the Extranet (
1. Click on RISK, REGULATIONS AND COMPLAINTS
2. Click on FINANCIAL CRIME
3. Click on the SUSPICIOUS ACTIVITY REPORTING drop down and follow the steps

12. Suspicious activity reporting (SAR) process
The steps are:
Either download and complete the SAR, or contact the Financial Crime Team directly
Ensure the SAR has all of the relevant details, is clear and descriptive (avoid jargon)
the completed SAR to: and include the client’s name within the ’s subject line
Once you’ve submitted the SAR, you must not discuss it with anyone, except as advised by the Financial Crime Team – as this would be Tipping off, which is a criminal offence. Do not indicate your suspicions on your client’s file or attach the SAR form to it
The ultimate decision to report is yours and you should not be influenced by another person’s views

13. Money Laundering Offences
As well as ‘Tipping off’, ‘Assisting’ and ‘Failing to report’ are also criminal offences – resulting in imprisonment and/or fines:
Tipping off
Imprisonment for a maximum of 5 years and/or an unlimited fine
Assisting
Imprisonment for a maximum of 14 years and/or an unlimited fine
Failing to report
Imprisonment for a maximum of 5 years and/or an unlimited fine
Being aware of your obligations, identifying suspicious activity and making a report meets your requirements under the Proceeds of Crime Act (POCA)

14. customer due diligence
We need to know who our customers are; Money Laundering Regulations require that you take steps to identify your clients; not only is this a legal requirement but also guards against identity theft.
Customer due diligence and monitoring must be carried out for two broad reasons:
To be reasonably satisfied that customers are who they say they are and live where they say the live; this information may be required by law enforcement should your client be suspected of committing offences under the Proceeds of Crime or Terrorism Acts
To determine whether they are acting on behalf of another and there is no legal reason (e.g. government sanctions) that the product or service requested can not be provided

15. Customer Due Diligence
Money Laundering Regulations require firms have appropriate AML systems and controls in place to reflect the degree of risk associated with the business it conducts and its customer base. Intrinsic have carried out a risk assessment on both the product and services we provide to our customers as well as customer profiles to enable us to determine appropriate Customer Due Diligence measures on a risk-sensitive basis; these depend on customer type, business relationship, product or transaction.

16. Customer Due Diligence – Risk Assessment
The risk assessment takes into account situations and products which can present a higher risk of money laundering or terrorist financing. This includes:
Where the customer has not been physically present for identification
Business relationships and occasional transactions with Politically Exposed Persons (individuals who have been entrusted with a public function i.e. a Member of parliament; further guidance can be found on the extranet click here) pre-approval from the financial crime team to carry out such a transaction is required
Customers who are from or receive funds from a High Risk Country (further guidance on High Risk Countries can be found here), pre-approval from the financial crime team to carry out such a transaction is required

17. customer due diligence
You can find the updated Risk Matrix, Flow Charts, Acceptable Form of ID List, Source of Funds, Source of Wealth and certification guidance on the Extranet, click here
What it means to you:
You will not need to complete URU for every client - the small premium exemption is still available and for low risk business, certified copies of client ID is sufficient
Our list of acceptable proofs has increased the variety of documents you can use to verify a clients ID
The ID process will be quicker for you as fewer concession requests will need to be made

18. Bribery What is Bribery?
‘An offer or receipt of any item of financial or other advantage from a person such as inducement to carry out a dishonest, illegal or trust-breaching act in the conduct of business’
The Bribery Act 2010 came into force on the 1st July 2011 and created the offences of:
Offering, promising or giving a bribe
Requesting or agreeing to receive or accept a bribe
Bribing a public official
Corporations failing to prevent bribery undertaken on its behalf

19. Corporate offence of Bribery
The corporate offence of failing to prevent bribery undertaken on behalf of corporations applies to:
All companies, partnerships and individuals doing business in the UK
Applies to acts or omissions worldwide
Intrinsic prohibits the offering, giving or accepting of any dishonest payment by its employees and members intended to alter theirs or another’s conduct or decision.

20. Conflicts of Interest
A conflict of interest may arise when a person becomes involved in a business relationship that could influence their decision making or conduct when fulfilling their obligations to Intrinsic, for example;
Encouraging a customer to purchase a less favourable product to receive a higher fee/commission
Advising as a Trustee, holding a Power of Attorney, becoming an Executor or a Beneficiary for a Will in respect of your own customers
The full conflicts of interest policy and guidance can be found here
Intrinsic requires its members to provide confirmation of compliance with the Conflicts of Interest Policy. This is achieved during Competency Assessments.

21. What it means to you – Bribery & conflicts of Interest
You must not offer, give or accept any dishonest payment intended to alter your own or another's conduct or decision.
You will be asked to complete a Conflicts of Interest Attestation during Competency Assessments. Any potential Conflicts should be disclosed to Intrinsic immediately regardless of when the Attestation was last completed.

22. Gifts & Entertainment
Intrinsic recognises that the giving and receiving of gifts and/or entertainment is a normal activity in the course of business. Intrinsic supports the activity provided it is reasonable in scale and nature, it is transparent and it does not cause decisions or conduct to be influenced. Intrinsic do not permit gifts to be made to Political Parties. The full Gifts and Entertainment policy can be found here

23. Gifts & Entertainment – Your Obligations
Advisers Need to read the Gifts and Entertainment policy and report any gifts and entertainment offered/received over the value of £50.00 to their Practice Principal. Consent from your Principal should be obtained prior to offering or accepting any gifts or entertainment. Practice Principals need to keep a register of Gifts and Entertainment offered to and received by customers; the register should be made available to your field supervisor at the firms’ Annual Inspection Visit and other members of Intrinsic Staff upon request.

24. Summary Money Laundering and associated acts are a criminal offence
Customer Due Diligence reflects the degree of risk associated with our business and customers
It is crucial that you know how to recognise and report suspicious activity and who the MLRO is
The offering or acceptance of a Bribe is a criminal offence
Gifts and Entertainment offered or received should be reported to your Practice Principal who should keep a record

25. Next steps
Familiarise yourself with the Retail Client AML Requirements by clicking here
Read Intrinsic policies by clicking here
Read the AML guidance published on the extranet by clicking here
Take the multiple choice test allocated to you in ‘Your Learning Academy’
Complete a conflicts of Interest attestation if you have not already done so or a new conflict has arisen since your last return