Proliferation Financing
There is now a requirement for relevant regulated persons to undertake a Money Laundering Proliferation Financing risk assessment due to The Money Laundering and Terrorist Financing (Amendment) (No. 2) Regulations 2022 which came into force on 1 September 2022. The risk assessment and policies and procedures have been inserted by virtue of Regulation 6.
What Is Proliferation Financing?
Proliferation financing means the act of providing funds or financial services for use, in whole or in part, in the manufacture, acquisition, development, export, trans-shipment, brokering, transport, transfer, stockpiling of, or otherwise in connection with the possession or use of, chemical, biological, radiological or nuclear weapons, including the provision of funds or financial services in connection with the means of delivery of such weapons and other CBRN-related goods and technology, in contravention of a relevant financial sanctions obligation.
Reporting Of Material Discrepancies To Companies House
Under Regulation 9 The Money Laundering and Terrorist Financing (Amendment) (No. 2) Regulations 2022 it is a requirement when doing customer due diligence for a relevant person to obtain extracts from Companies House (to show what has been recorded on the register about persons with significant control and beneficial owners) and to report discrepancies in the information.
High Risk Countries For Money Laundering
Enhanced customer due diligence procedures are required under Regulation 33 of the The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.
On 14 November 2022 HM Treasury issued a notice an Advisory Notice that removes Nicaragua and Pakistan are no longer listed as a high risk countries requiring these extra checks.
Source Of Funds
Under Regulation 28(11) of The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 there is a requirement to validate the source of funds:
(11) The relevant person must conduct ongoing monitoring of a business relationship, including—
(a) scrutiny of transactions undertaken throughout the course of the relationship (including, where necessary, the source of funds) to ensure that the transactions are consistent with the relevant person’s knowledge of the customer, the customer’s business and risk profile;
(b) undertaking reviews of existing records and keeping the documents or information obtained for the purpose of applying customer due diligence measures up-to-date.
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