Red Flag indicators
Flag it up campaign
The government Flag it up campaign lists flags to be alert to when dealing with both new and existing clients:
Transactions. Are transactions unusual because of their size, frequency or the manner of their execution, in relation to the client’s known business type?
Structures. Do activities involve complex or illogical business structures that make it unclear who is conducting a transaction or purchase?
Assets. Does it appear that a client’s assets are inconsistent with their known legitimate income?
Resources. Are a client’s funds made up of a disproportionate amount of private funding, bearer’s cheques or cash, in relation to their socioeconomic profile?
Identity. Has a client taken steps to hide their identity, or is the beneficial owner difficult to identify?
Behaviour. Is the client unusually anxious to complete a transaction or are they unable to justify why they need completion to be undertaken quickly?
Political status. Is the client engaged in unusual private business given that they hold a prominent public title or function? Or do they have ties to an individual of this nature?
Documents. Are information or documents being withheld by the client or their representative, or do they appear to be falsified?
Geographical area. Is the collateral provided, such as property, located in a high-risk country, or are the client or parties to the transaction native to or resident in a high-risk country?
Choice of professional. Have you, or other professionals involved been instructed at a distance, asked to act outside of your usual speciality, or offered an unusually high fee?
National Crime Agency (NCA)
Accountants should also be alert to the following information:
Accountancy sector AML alert
The Accountancy AML Supervisors’ Group (AASG) summarised versions of Intelligence provided by the Joint Money Laundering Intelligence Taskforce (JMLIT) issued by the IFA, as your AML supervisor.
JMLIT is a partnership between law enforcement and the financial sector to exchange and analyse information relating to money laundering and wider economic threats. The original NCA/JMLIT alert can be provided on request if you require further details.
These alerts are circulated to the Money Laundering Reporting Officer (MLRO)/Single Point of Contact (SPOC) of an IFA supervised firm in strictest of confidence. If you have any queries regarding these alerts, please contact [email protected].