Bpp learning Media is an acca approved Content Provider

286
 
Although investment firms may be particularly at risk of being involved with clients who are seeking to 
launder money, 
methods used
for laundering such dirty money 
can be extremely complex
. They may 
involve 
trusts, companies
(both offshore and onshore) and could involve the use of relatively complex 
bank instruments. 
Therefore 
all companies
, their 
managers
and their 
advisers
need to be aware
of the issue of money 
laundering and not fall foul of the regulations. 
There is a 
legal requirement
for organisations to take the following actions. 

To set up procedures and establish accountabilities for senior individuals to take action to prevent 
money laundering 

To educate staff and employees about the potential problems of money laundering 

To obtain satisfactory evidence of identity where a transaction is for more than €15,000 

To report suspicious circumstances (according to the established procedures) 

Not to alert persons who are or might be investigated for money laundering 

To keep records of all transactions for five years 
6.7 The costs of compliance 
All of the activities listed above do not come cheaply, especially if policies and procedures are being 
established for the first time. In addition, regulations in the UK state that all accountants in public 
practice must be supervised and monitored in their compliance and registered with a supervisory body.
ACCA is one of the supervisory bodies and is responsible for monitoring its own members. Such 
supervision comes at a cost, however, and monitored firms are expected to pay a fee for this service. 
6.8 Financial Action Task Force (FATF) 
The Financial Action Task Force (FATF) is an inter-governmental body which develops and promotes 
policies, at national and international levels, to combat money laundering and terrorist financing. FATF 
currently has over 30 member states, including the UK, many EU states, Turkey, India, China, Japan, 
New Zealand, the US, Brazil and Argentina. 
FATF members are committed to implementing FATF standards and having their anti-money laundering 
(AML)/counter-terrorist financing (CTF) systems mutually assessed. A country needs to do the following 
in order to implement FATF's recommendations effectively. 

Successfully investigate and prosecute money laundering and terrorist financing 

Deprive criminals of their criminal proceeds and the resources needed to finance their illicit 
activities 

Require financial institutions and other businesses and professions to implement effective 
measures to detect and prevent money laundering and terrorist financing 

Ensure that financial institutions and other businesses and professions comply with AML/CTF 
requirements 

Enhance the transparency of legal persons and arrangements 

Implement mechanisms to facilitate co-operation and co-ordination of AML/CTF efforts at the 
international and domestic level
6.9 International Monetary Fund (IMF) 
The IMF is increasingly involved in addressing the risks of money laundering. 
It promotes itself as a natural forum for sharing information, developing common approaches to issues 
and promoting desirable policies and standards in order to fight money laundering and the financing of 
terrorism. 
BPP Tutor Toolkit Copy

---

CHAPTER 10
//
IDENTIFYING AND PREVENTING FRAUD