Training

It's the first day of summer and of course it is pouring with rain and blowing a gale whilst I try to compose a few pertinent words about training. When I talk of training of course I am referring to my own area of expertise which is anti money laundering and kindred issues.

I have spent a little while over the past few days creating the outline of one day AML course that I can present through a local training provider, and it occurred to me that there is an awful lot of content that could be included. Is it all necessary though?  Yes, of course if you are in a specific profession then there will be specific issues that relate to you, but only to you and that is the problem with AML training generally, it can be too detailed. When I look around I see that there is bespoke training available for lawyers, accountants, banks, and other financial services providers, but I don't see anything that is really general in nature. By general I mean something relatively short and concise that would be appropriate for the great number of ordinary businesses out there who merely want to comply with the law and ensure that criminals cannot take advantage of them by laundering their ill-gotten gains through them.

Training is provided in some Metropolitan areas but at what cost?  One example I found was for 3 hours training for £299 per person, and that is something that small and medium sized businesses usually cannot afford, and if they could, many would be loathe to spend that type of money on what is considered to be a niche area.  When you consider that all members of staff regardless of their position have a role to play in making sure the reputation of the business is protected and the threat to it is minimised, you want to encourage as many people as possible to attend at an affordable price.

This can be achieved by cutting out a lot of the more specialised areas that are specific to only a few professions as they can be delivered to those people on a needs basis.  All that business in general needs to understand in the first instance is:

• The three stages of money laundering, the history of its development, why it is important, and the consequences of non-compliance.
• The legal framework of the relevant UK legislation dealing with money laundering and the proceeds of crime, and how to comply.
• What is meant by the Risk-Based Approach and how to conduct a risk assessment in the workplace.
• The main principles of Know Your Customer or Customer Due Diligence.
• The meaning of suspicion and how to recognise and report it.
• High Value Dealers and other high risk businesses.

This is a good first module and if people are interested in improving their understanding or want material that is specific to their business that can be designed too. I think for far too long the mystique around money laundering and the countering of terrorism has been allowed to develop to the extent that people view it as a complicated and specialised subject, trained by the few, at rates they think they can achieve.  It doesn't need to be, and my view is it should be shared with as wider an audience as possible because it is only through raising awareness at grassroots level generally that it will be tackled successfully.

If you have any comments I will be pleased to hear them.

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Yachts and Motor Boats

My wife and I went into Pwhlleli on the bank holiday weekend to visit the Land & Sea Food festival down at the Marina.  It was a lovely day and having sampled the fayren on offer, we decided to have a walk around the Marina area and look at the boats. This being the real start of the tourist season the tractors were busy taking boats to and from the water, some luxury, others more modest.

We had a wander around the boats for sale and I was marginally surprised by how expensive they all were. A small gleaming white speedboat that my wife took a shine to was priced at GBP15,950 whereas a more sturdy fishing boat that I could happily spend my retirement years on cost a whopping GBP65,000, and there were many more in besides, and a good number of similar boatyards.

After a few moments dreaming of winning the national lottery, or having a job that would pay enough to purchase one of these marvellous and beautiful pieces of engineering, I began to wonder about the process of buying and selling one of them.

The businesses that sell these items are clearly within the definition of a High Value Dealer (HVD) and could be subject to the Money Laundering Regulations 2007. They state that an HVD can accept cash payments of whatever figure, but that those who accept a cash payment in excess of €15,000 (about GBP 12,500) or a series of lower, linked payments to that threshold, is required by law to comply with all the implications that the leglislation brings with it. 

These include undertaking appropriate due diligence on customers, completing a risk assessment, appointing a nominated officer, putting an anti money laundering policy and system in place to identify and prevent, and then report suspicious transactions to the National Crime Agency (NCA), keep records for 5 years, register with Her Majesty’s Revenue and Customs (HMRC), pay an annual fee, and report any changes within the registration year. It also includes ensuring that all the staff are aware of the money laundering issues and are continually kept up to date.

Even if you only occasionally accept cash payments at or above this threshold, you are still required by law to comply, even if you are selling to your best friend or a fmily member you have known for years.

If you have made a policy in your business that under no circumstances will you accept these large cash payments, you must have a written policy that says this and ensure all your staff and customers are aware of it.  In addition, if you are unsure that you will do business like this and decide not to register, you must refuse such payments and insist on payment by some other means or risk a heavy penalty.

Don’t forget also that the 4^th EU Directive on Money Laundering has been agreed and will be in force soon, and that reduces the cash payment threshold to €10,000 or GBP 7,500 and I will explore the ramifications of this topic more in my next blog. 

Romance

As it was pouring with rain this morning I was able to opt out of doing anything meaningful in the garden, or with preparing the cottage for the next group of visitors who are due this weekend. Instead I was able to catch up with the weekends news and read a few articles on the various social and business media I scan.

One article that caught my attention was a news story from Australia that stated that in 2014 the relevant authorities had received 91,000 complaints about some scam or another that had netted the fraudsters the equivalent of £42 million. Of this nearly £14 million was the result of so called 'Romance Scams' where people are targeted through lonely hearts dating sites and the like, by people who are not whom they say they are and are not interested in love, merely obtaining as much money as possible. As with most frauds once you are hooked something happens to our brains and we don't want to admit that it may be a fraud and we think of ever more incredulous explanations to justify why a person is doing what they are doing. When you are desperately looking for love and affection it doesn't matter whether it is money for tickets, visas, time off work or gifts, if you think the other person is genuine you will pay whatever it costs.

Now with a population of only 24 million that is a lot of money for a country like Australia and I started to think about how many victims there may be in the UK with a population of around 63 million people. We are roughly the same demographic, same kind of people you would say, so the value of this type of fraud on the public at large must be around at least £40 million.  A study carried out in the UK in 2011 suggested that more than 200,000 British citizens had fallen victim to this type of crime, while over a million know someone who has been scammed and that would corroborate these figures.

That's an awful lot of money collectively but individually people are sometimes losing up to £50,000 or more. Now you may say, "well it serves them right for being so stupid" but in my experience of dealing with type of crime, the victims are far from stupid and are usually ordinary people caught up in something they can neither understand or can comprehend that would happen to them. Of course it is not just foreigners preying on lonely British people as a female friend in Russia contacted me the other week to say that she had been on a dating site and had been contacted by this man from the UK and they were discussing he coming to London to live with him. When she shared the correspondence she had with him it was not an easy task to inform her that she was the victim of an elaborate scam. The thing is the person probably wasn't in the UK at all but had hijacked a UK email address to conduct his fraudulent activity.

How many victims are there out there who are too afraid or embarrassed to report the fraud? I think the figures speak for themselves as Action Fraud reported just over 2000 dating scams being reported between March 2013 - April 2014.

Please remember, "if it appears to be too good to be true, it probably is". If you think you have been the victim of such a scam report it to Action Fraud or if you are concerned that you currently are, speak to someone who can provide you with some objective advice. It may save you a lot of heartache and money in the future.