Aziz Rahman

Points of law: How do I make sure I'm not money laundering?

Aziz Rahman of award-winning business crime solicitors Rahman Ravelli points out the steps that those in business can take to tackle the problems of money laundering.

Money laundering is a term that conjures up a number of images. Many people will think of films or TV series where the bad guys have been involved in money laundering as a way of disguising the fact that their wealth has come from illegal activities.

While money laundering is often used to dramatic effect on the small or big screen, it would be a big mistake to think that it is more common in fiction than in reality. Money laundering has always been present in business. And those in business need to be aware of it – and how to prevent it.

The last few weeks have seen the biggest bank in Germany, Ireland’s largest lender and one of France’s most prominent finance houses all fined millions for having inadequate procedures for preventing money laundering. In one such case, Deutsche Bank has now had to pay a total of £500m in penalties for lapses that allowed an estimated £7bn to be laundered through it.

Such figures may underline the scale of money laundering. But please don’t think it is only something that affects big banks.

There are money laundering regulations that apply specifically to what is called the regulated sector: banks, insurance companies, investment firms and other organisations that regularly handle large amounts of money. But money laundering is something that everyone in business has to be aware of – as such awareness can keep you safe.

Money laundering is the disguising of “dirty’’ money – money gained from criminal behaviour. The laundering tends to be done by someone looking to put the dirty money through a legitimate company before then taking it back out.

By doing this, they hope that the criminal proceeds can no longer be identified as such.

There are a lot of people looking to hide wealth gained from illegal activity. This means that a lot of legitimate businesses or organisations could well be targeted.

But this need not be a problem if you know what money laundering is and what to do to protect yourself.

The offence

Money laundering is an offence in the UK under the Proceeds of Crime Act 2002 (POCA): Section 327 makes it an offence to conceal, disguise, convert, transfer or remove money or other assets derived from crime, Section 328 makes it illegal to arrange to acquire, retain or use such assets, while Section 329 makes it an offence to possess them.

Fines can be imposed on individuals or companies and a person found guilty of such an offence can be jailed for up to 14 years.

Sections 330 to 332 make it an offence to fail to disclose knowledge or suspicion of money laundering in the regulated sector. Turning a blind eye to money laundering, therefore, is not an option.



If you or your company are accused of money laundering or you discover that a person has used your business to commit it, it will not necessarily mean that you will be prosecuted.

The authorities will take a more lenient view of events if you can show them that you were as careful as you could have been and took all possible precautions to prevent money laundering.

This means:

* Making thorough checks on the identity and background of a client, business associate or any other person wanting to trade with, or have any kind of involvement with, your business.

* Taking time to analyse the behaviour of anyone wanting to move money or other assets in or out of the business.

* Ensuring you know exactly who is involved in a deal, who the beneficiaries are, the exact sources of funding and the relationships between all parties.

* Introducing procedures into the business that will reduce the risk of money laundering. Imposing limits on the size of cash-only deals and on access to company banking facilities and introducing a whistle blowing procedure for staff to report suspicions can all greatly reduce the potential for laundering.


Such actions show the authorities that you did everything possible to spot any indicators of money laundering.

The indicators may vary according to the business sector involved. But the following circumstances should make anyone in business concerned about the real purpose of a transaction:

* Someone in a deal being vague or reluctant to disclose details about the precise sums of money, the identities of everyone or the exact activities involved.

* An insistence on unusual conditions or complex arrangements being attached to a deal.

* Your firm being asked, out of the blue, to be involved in a deal by someone who has never previously traded with you.

* A sudden request for a deal to be completed in cash.

* Unexplained movements of assets.

Money laundering has to be prevented. And while it is a problem, taking the steps outlined above will go a long way to deterring the money launderer or making it easier to identify their criminal intentions.

Aziz Rahman is founder of Rahman Ravelli: a top-ranked business crime law firm in national and international legal guides.

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