Whether you’re a dedicated money laundering reporting officer (MLRO) or a fee earner, being able to recognise the red flags that warn of potential money laundering is vital. As criminals become increasingly sophisticated and tenacious, it’s important to stay up to date on the warning signs.
Here are just a few red flags to watch out for:
- Secretive or evasive: is your client upfront about who they are, the reason for the transaction, and the source of funds?
- Avoidant: Are they avoiding personal contact without good reason?
- Withholding or lacking documentation: Do they refuse to provide information or documents? Or do they offer documents that appear suspicious?
- Suspiciously expert: Do they appear to have an unusually high level of knowledge about money laundering processes?
- Unusual or unexplained source of funds or wealth: Look out for large cash payments, unexplained payments from a third party, loans from non-institutional lenders, use of multiple accounts or foreign accounts.
- Unusual transaction features: Is the requested transaction unusual in the size, nature, frequency or manner of transaction?
- No obvious link to your firm: If the client not local or known to you, can they provide a reasonable explanation as to why they chose your practice?
We’ve written ‘A Conveyancer’s Guide to AML Risk Assessment and Compliance’ to help make sure you’re on the right track. You can download it here.