Monday, 11 February 2013

Risk scoring the potential for Money Laundering

When it comes to assessing the risk of money laundering a conveyancing solicitor should adopt common sense approach. Risk factors tend to be cumulative, and often involves that more than one key identifier. I set out below some of the more common risk factors to consider :-

  • Has the client dis-instructed a previous solicitor before retaining your firm?
  • Has the firm conducted conveyancing for this client before?
  • Is this transaction involve a mortgage or is it a cash purchase?
  • Is there a foreign or offshore element to the conveyance such as money coming from abroad?
  • Does the client live far from the office? This is more relevant where most of your clients are local.
  • Are you being asked to act for both buyer and seller ?
  • Will the conveyancing transaction differ materially from the original instructions or from the written record? By way of example are you now being told that the deposit has been paid directly to the seller?
  • Is the conveyancing in some other way unusual or complex?
  • Do you feel uneasy as a result of being placed under pressure or inducement to move the transaction forward? Perhaps there is an unusual sense of urgency that can not be explained by a legitimate deadline?

Clearly the above list is not comprehensive but do consider whether the above questions or others should form part of a checklist. The presence of just one of the above risk factors may be sufficient to trigger suspicion. In each case, a common sense risk based approach must be taken, and the greater the number of risk factors present, then the more due diligence will need to be undertaken. Chances are that if it smells rotten it probably is.

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