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Anti-money Laundering : Report

   

Added on  2020-01-15

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BANKING LAW

“Critically explain the law underlying the submission of a suspicious activity reportand analyse how a bank might avoid liability for breaching obligations owed tocustomers in complying with the United Kingdom’s anti-money laundering regime”Banking law particularly includes various rules and federal regulations whichare designed for financial institutions. The individuals working in the area ofregulation are responsible to handle customer disputes, complaints made against bank,handling complex litigation between national and international institutions, theirinvestors, the government as well as other parties. There have been seen large numberof regulations which are to be strictly complied by law. Including this, the area ofbanking law also covers different transactions held between financial institutions suchas banks and its customers.1The issue of money laundering has been increasedglobally which has facilitated international banks to manage their cross-border anti-money laundering efforts so as to carry out an effective identification of individualsinvolved in money laundering or entities financing terrorism.Financial banks are needed to disclose information about whom moneylaundering disclosures have been made. The financial institutions also need to offerinformation about the customers who could expose banks to be liable for losses heldto them just due to banks' money laundering disclosures. For this purpose,organizations generally designs SAR (Suspicious Activity Report), financialinstitutions is further known as a piece of evidence which sirens for enforcing law forsome client/customer’s activity that are in some way suspicious and could cause tomoney laundering or terrorist financing (Money Laundering Regulation Compliance;Risks and Costs. 2016). The unit herewith defines the law underlying the submissionof a suspicious activity report while putting a particular consideration to MoneyLaundering Regulations. Here, a specific focus is given to United Kingdom’s anti-money laundering regime and the situations where bank might avoid liability forbreaching obligations owed to customers,which are specifically explained with realcase examples. 1Lovett, William, and Michael Malloy.Banking and Financial Institutions Law in a Nutshell, 8th. WestAcademic, [2014].

Law underlying the submission of a suspicious activity report Before considering the laws, it is important to know about the suspicioustransaction or activity. As defined by HM Revenue & Customs, there are manyreasons for which a corporate entity and its employees might become suspicious abouta transaction or activity. Often, the activities become suspicious because, these areunusual for business, nonetheless, a customer possibly has tried to make extreme largecash payment2.Within banking business, it is often seen that customers transactfrequently, but, when the large amount is transacted by regular customers who do notusually transact in such limit may be considered as a suspicious activity occurred inthe business.Some customers behave strangely; even they makeunusual requests whatdo not have any sense, it turns employees to suspect them. The most important forbanks is to carefully look into all unusual transactions so as to view, if there isanything suspicious about an activity (GOV.UK, 2016)The report for suspicious transaction or activity can be made by anyone in theorganization; however, they need to be aware of the ‘nominated officer’. Then, thenominated officer becomes responsible to choose whether a report or disclosuretheincident to the National Crime Agency (NCA). For this, they have to make aSuspicious Activity Report. The nominated officers in the banks have the right tosuspend the transaction in case, the activity is suspected under money laundering orterrorist financing. However, in the practical scenario, it becomes unsafe to suspendthe transaction, than nominated people must make the report as soon as possible laterthe business activity is completed3. Furthermore, NCA collects and examinesSuspicious Activity Reports, and use such to identify the proceeds of crime, and if, itcounters money laundering and terrorism, then the case information is passed to lawenforcement agencies.2GOV.UK, 2016. Money Laundering Regulations: report suspicious activities. [Online]. Availablethrough: < https://www.gov.uk/guidance/money-laundering-regulations-report-suspicious-activities>. [Accessed on 19th July 2016].3Money Laundering Regulation Compliance; Risks and Costs. 2016. Available through:<https://www.slaughterandmay.com/media/559043/an_introduction_to_the_uk_anti_-_money_laundering_regime.pdf>. [Accessed on 19th July 2016].

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