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AUDIT, GOVERNANCE &

STANDARDS COMMITTEE

13th January 2020

 

Anti-Money Laundering Policy and Guidance

 

Final Decision-Maker

Audit, Governance & Standards Committee

Lead Head of Service

Chris Hartgrove Ė Interim Head of Finance

Lead Officer and Report Author

John Owen Ė Finance Manager

Classification

Public

 

 

 

Executive Summary

This report updates the Councilís current Anti-Money Laundering Policy and guidance to various stakeholders of the Council on how to prevent, detect and report cases of fraud through money laundering.

 

Purpose of Report

This report is for discussion and to adopt at this Committee.

 

 

This report makes the following recommendations to this Committee:

1.   That the Councilís updated Anti-Money Laundering Policy is adopted and Mark Green, Director of Finance and Business Improvement (S151 Officer) is confirmed as the Councilís Money Laundering Reporting Officer (MLRO).

 

 

 

Timetable

Meeting

Date

Audit, Governance & Standards Committee

13th January 2020

 

 



Anti-Money Laundering Policy and Guidance

 

1.       CROSS-CUTTING ISSUES AND IMPLICATIONS

 

 

Issue

Implications

Sign-off

Impact on Corporate Priorities

We do not expect the recommendations will by themselves materially affect achievement of corporate priorities.  However, awareness of money laundering will support the Councilís overall achievement of its aims by detecting and reporting fraud.

Interim Head of Finance

Cross Cutting Objectives

We do not expect the recommendations will by themselves materially affect achievement of cross cutting objectives.† However, awareness of money laundering will support the Councilís overall achievement of its aims by detecting and reporting fraud.

Interim Head of Finance

Risk Management

Already covered in the risk section

Interim Head of Finance

Financial

There are no financial implications to accepting this policy, however through staff, Members and contractors of the Councilís awareness, this will hopefully reduce the risk of fraud against the Council.

 

Section 151 Officer & Finance Team

Staffing

None.

 

Interim Head of Finance

Legal

This report is drafted in accordance to the regulations of The Proceeds of Crime Act 2002, the Terrorism Act 200 and the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017.

 

Team Leader (Corporate Governance), MKLS

Privacy and Data Protection

All information obtained for the purposes of money laundering checks and referrals must be kept (for at least five years) and processed in compliance with relevant Data Protection legislation.

Policy and Information Team

Equalities

The recommendations do not propose a change in service therefore will not require an equalities impact assessment

Policy & Information Manager

Public Health

 

 

We recognise that the recommendations will not negatively impact on population health or that of individuals.

Public Health Officer

Crime and Disorder

The recommendation will have a negative impact on Crime and Disorder. The Community Protection Team have been consulted and mitigation has been proposed

Interim Head of Finance

Procurement

There are no procurement implications for this report, however procurement is at risk of infiltration from serious and organised crime and organised crime groups could be benefitting from public sector contracts.

Interim Head of Finance Section 151 Officer

 

 

 

 

 

2.   INTRODUCTION AND BACKGROUND

 

2.1     Money laundering involves the ďcleaningĒ of illegal proceeds in order to disguise their criminal origin. The proceeds of criminal activity, usually cash, but also other illegally gained assets, are introduced into the organisationís systems where they are processed, enabling them to leave the systems appearing to come from a legitimate source.

 

2.2     The Proceeds of Crime Act 2002, the Terrorism Act 2000 and Money Laundering Regulations 2017 place obligations on the Council to establish internal procedures to prevent the use of their services for money laundering and the prevention of terrorist financing. The Council must also appoint a Money Laundering Reporting Officer (MLRO) to receive disclosures of money laundering activity.

 

2.3     The previous policy drafted in October 2014 is required to be updated and adopted by this Committee due to the changes within the Money Laundering Regulations 2017. There is a more due diligence around checking perceived higher risk customers and where funds have been received, using a general risk based approach in respect to money laundering.† These have been included within the updated policy as shown within Appendix A.

 

2.4     Accompanying this policy is a guidance document that sets out the procedures, which must be followed (for example reporting of suspicions of money laundering activity) to enable the Council to demonstrate compliance with its legal obligations.

 

2.5     The officer to receive disclosures about money laundering activity is the Money Laundering Reporting Officer (MLRO).† The nominated officer must be someone within the Council, who

 

         can be trusted with the responsibility

         is senior enough to have access to all your customer files and records

         can decide independently whether or not they need to report suspicious activities or transactions - a decision that could affect your customer relations

 

The nominated person for this role is Mark Green, Director of Finance & Business Improvement (Section 151 Officer).

 

2.6     Whilst Local Authorities are not directly covered by the requirements of the Money Laundering Regulations 2017, guidance from finance and legal professions, including the Chartered Institute of Public Finance and Accounting (CIPFA), indicates that public service organisations should comply with the underlying spirit of the legislation and regulations.

 

 

 

3.   AVAILABLE OPTIONS

 

3.1     Option 1: The Committee could decide not to adopt the policy. However, the Chartered Institute of Public Finance and Accounting (CIPFA), indicates that public service organisations should comply with the underlying spirit of the requirements of the Money Laundering Regulations 2017 in establishing internal procedures to prevent the use of their services for money laundering and the prevention of terrorist financing. The Council must also appoint a Money Laundering Reporting Officer (MLRO) to receive disclosures of money laundering activity.

3.2     Option 2: Subject to any legal obligations placed upon the Council, the

†† Committee could amend the draft policy.†

3.3     Option 3: The Committee could agree the attached policy. The attached policy has been produced in line with current guidance from the Proceeds of Crime Act 2002, the Terrorism Act 2000 and Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.

 

 

4.        PREFERRED OPTION AND REASONS FOR RECOMMENDATIONS

 

4.1     The recommended option is Option 3, to adopt the Anti-Money Laundering Policy & Guidance and to appoint Mark Green as the Money Laundering Reporting Officer (MLRO).

4.2     As stated above, the policy has been produced in line with current guidance from the Proceeds of Crime Act 2002, the Terrorism Act 2000 and Money Laundering Regulations 2017.

 

 

5.       RISK

 

5.1    This report discusses the risk of money laundering within the Council and is designed to make all relevant stakeholders aware of what constitutes money laundering and the procedures for reporting such incidents.

 

 

 

6.       CONSULTATION RESULTS AND PREVIOUS COMMITTEE FEEDBACK

 

6.1     None.

 

 

7.       NEXT STEPS: COMMUNICATION AND IMPLEMENTATION OF THE DECISION

 

7.1     Once the policy has been adopted by this Committee, it will be communicated to all relevant staff within the Council.

 

 

 

8.        REPORT APPENDICES

         Appendix A: Anti-Money Laundering Policy & Guidance

 

 

9.        BACKGROUND PAPERS

9.1     This report has been drafted from guidance from the following publications:

 

           The Proceeds of Crime Act 2002††††††††††††††††††††††††††††††††††††† ††††††††† http://www.legislation.gov.uk/all?title=Proceeds%20of%20crime

†††

         The Terrorism Act 2000†††††††††††††††††††††††††††††††††††††††† ††††††††† http://www.legislation.gov.uk/all?title=terrorism%20act

 

         The Money Laundering Regulation 2017††††††††† http://www.legislation.gov.uk/uksi/2017/692/made††††††

 

         HM Treasury† https://www.gov.uk/government/publications/anti-money-laundering-legislation-guidance-notes† †††††

 

         Law Society http://www.lawsociety.org.uk/advice/anti-money-laundering/

 

         National Crime Agency http://www.nationalcrimeagency.gov.uk/