Anti Money Laundering Policy 2021 to 2022

6.1 Customer due diligence means that the Council must know its clients and understand their businesses. This is so that the Council is in a position to know if there is suspicious activity that should be reported; clearly it is only by the Council knowing its clients and their businesses that it can recognise abnormal and possibly suspicious activity.

6.2 The obligations imposed on the Council must, of course, be brought into effect by its individual employees. Employees must therefore be familiar with these obligations.

6.3 The 2017 Regulations and 2019 (as amended) require that the Council identifies its customers and verifies that identity based on documents, data or information obtained from a reliable source. Where there is a beneficial owner who is not the customer then the Council must identify that person and verify the identity and where the beneficial owner is a trust or similar then the Council must understand the nature of the control structure of that trust.

6.4 The Council must obtain information on the purpose and intended nature of the business relationship.Under the UK’s Money Laundering Regulations (regulation 33(1)(b), enhanced due diligence (EDD) is mandated for any business relationship with a person established in a high-risk third country. Until the end of the Brexit transition period, the list of high risk countries was determined by the European Union (EU) under the 4th Anti Money Laundering Directive. From 1 January 2021, the UK has had its own standalone list. Since then, any amendments to the EU list do not have effect in the UK. The UK is entitled to amend its own list of high-risk countries under section 49 of the Sanctions and Anti Money Laundering Act 2018 and has announced proposals to align further with Financial Action Task Force (FATF) practices. The list of high-risk countries was amended in July 2021 by regulation 2 of the Money Laundering and Terrorist Financing (Amendment) (No 2) (High-Risk Countries) Regulations 2021. The 24 high-risk countries are:

• Albania
• Barbados
• Botswana
• Burkina Faso
• Cambodia
• Cayman Islands
• Democratic People's Republic of Korea (DPRK)
• Haiti
• Iran
• Jamaica
• Malta
• Mauritius
• Morocco
• Myanmar
• Nicaragua
• Pakistan
• Panama
• Philippines
• Senegal
• South Sudan
• Syria
• Uganda
• Yemen
• Zimbabwe

Ghana has been removed from the list and Haiti, Malta, Philippines and South Sudan have been added.

For an up to date list of such jurisdictions an officer should seek advice from the MLRO.

6.5 The checks described in the paragraph above must generally be undertaken by the Council before it establishes a business relationship or carries out an occasional transaction, or if it suspects money laundering or terrorist funding or doubts the veracity of any information obtained for the purposes of identification or verification. However, the Council is not required to undertake these checks if its customer is another public authority, unless it suspects money laundering or terrorist funding.

6.6 The Council is also obliged to maintain ongoing monitoring of its business relationships which means it must scrutinise transactions throughout the course of the relationship to ensure that the transactions are consistent with the Council’s knowledge of the customer and keep the information about the customer up-to-date.

6.7 Where property transactions are carried out using externally appointed agents on behalf of the Council, the agent will be required to perform and evidence the “know your client checks (KYC)” and these should be shared and retained by the Council.

6.8 Where the Council is not able to apply the customer due diligence measures set out above it must not carry out a transaction with or for a customer through a bank account, it must not establish a business relationship or carry out an occasional transaction with the customer, it must terminate any business relationship with the customer and consider whether to make a disclosure.

6.9 However, the above paragraph does not apply where a lawyer or other professional adviser is in the course of advising the legal position for his or her client or performing his or her task of defending or representing that client in, or concerning, legal proceedings including the advice on the institution or avoidance of proceedings.