Should Outside of a regulatory context, good practice for most situations in the Sector Affinity Group's view. These may not be the only means of complying with legislative or regulatory requirements and there may be situations where the suggested route is not the best possible route to meet the needs of your client. However, if you do not follow the suggested route, you should be able to justify to oversight bodies why the alternative approach you have taken is appropriate, either for your practice, or in the particular retainer. May A non-exhaustive list of options for meeting your obligations or running your practice. Which option you choose is determined by the profile of the individual practice, client or retainer. You may be required to justify why this was an appropriate option to oversight bodies. Chapter 2 - Risk-based approach Note: References to client accounts and management of trusts, companies and charities in sections 2.3.2.2, 2.4.2 and 2.4.5 do not apply to barristers or advocates for the reasons set out in section 1.1.1. 2.1 General comments The possibility of used to assist with money laundering and terrorist financing poses many risks for the practice of an independent legal professional, including: criminal and disciplinary sanctions for the practice and individuals in the practice civil action against the practice as a whole, as well as certain individuals damage to reputation leading to a loss of business. These risks must be appropriately identified, assessed and mitigated, just as you do for all business risks facing your practice. If you know the risks that you face generally and know your client well and understand your instructions thoroughly, you will be better placed to assess risks and spot suspicious activities. Adopting a approach to preventing money laundering means that you focus your resources on the areas of greatest risk. The resulting benefits of this approach include: more efficient and effective use of resources proportionate to the risks faced, minimising compliance costs and burdens on clients. and greater flexibility to respond to emerging risks as laundering and terrorist financing methods change. The approach does not apply to reporting suspicious activity, because and the Terrorism Act lay down specific legal requirements not to engage in certain activities and to make reports of suspicious activities once a suspicion is held.
arms manufacturing/supply and the defence industry Clearly not all work in these sectors will be higher risk but it is essential to be aware of the potential for risk so that you can implement proportionate procedures for closer scrutiny on client and matter acceptance. 2.3.1.4 Acting for politically exposed persons (PEPs) An independent legal professional’s exposure to PEPs is also a major consideration in carrying out your practice-wide risk assessment. A PEP may be a client or a beneficial owner of a client but it is important to consider the type of PEPs that you act for and whether the work to be undertaken will affect your overall risk profile. PEPs are considered in section 4.12.2. 2.3.1.5 Acting for clients without meeting them In an increasingly global and technologically advanced environment, it is commonly the case that you will act for clients without meeting them. You should include this as a factor when you out your practice-wide risk assessment. In addition, you should consider the systems and procedures that you have implemented to mitigate the risks associated with acting for clients you do not meet. When you act for clients without meeting them you must be satisfied that it sense in all the circumstances that you have not met the client and you must be comfortable that you can mitigate the risks of identity fraud. 2.3.1.6 Clients with high cash turnover businesses You should consider whether your practice frequently acts for clients who operate or benefit from high cash turnover businesses as these businesses may be appealing to criminals seeking to launder money. 2.3.2 Services and of law and geographical location of services provided In carrying out your practice-wide risk assessment you must consider risks associated with the services you provide, the transactions you participate in and the countries or geographic areas in which you operate. 2.3.2.1 Services and areas of law Many studies have highlighted that independent professionals face the greatest potential risks in the following areas: misuse/abuse of client accounts sale/purchase of real property creation of trusts, companies and charities management of trusts and companies sham litigation
measures required by Regulation 28 33(1) and (4)-(6) Obligation to enhanced due diligence 35 Enhanced due diligence: politically exposed persons 37 Application of simplified due diligence 39(2) and (4) Reliance 40(1) and (5)-(7) Record keeping 41 Data protection 43 Corporate bodies: obligations 44 Trustee obligations 45(2) and (9) Register of beneficial ownership 56(1) and (5) to be registered 57(1) and (4) Applications for registration 66 Power to require information 69(2) Entry and inspection without a warrant 70(7) of premises under warrant 77(2) and (6) to impose civil penalties, suspension and removal of 78(2) and (5) Prohibitions Offence of prejudicing investigations Under Regulation 87 a person commits the offence of prejudicing an investigation if: They know or suspect that an officer or proper person is acting in connection with an investigation which is being, or is about to be, conducted, or