Money laundering is the process by which criminals attempt to conceal the original source of the proceeds of their criminal activities. They do so by submerging such proceeds into the financial system. They then use any number of different instruments, accounts and insurance opportunities, frequently on a world-wide basis, with the intention of ultimately withdrawing money which has been through so many different changes that its original identity has been lost.
The following constitute primary money laundering offences:
- Concealing, disguising, converting or transferring criminal property
- Entering into or becoming concerned in an arrangement which you know or suspect facilitates the acquisition, retention, use or control of criminal property by or on behalf of another person
- Acquiring, using or possessing criminal property
There are also two ‘third party’ offences – failure to disclose one of the three principal offences and ‘tipping off’. Tipping off is where someone informs a person or people, who are, or are suspected of being, involved in money laundering, in such a way as to reduce the likelihood of their being investigated or prejudicing an investigation.
The money laundering offences carry potential criminal penalties, for both the Club, its Managers and individuals. It is therefore important to ensure that the Club, its Managers and all of its staff are not exposed to or involved in money laundering activity. The key controls are to ensure:
- All those working within the Club and its Managers, who are most likely to be exposed to money laundering, are aware of the risks of money laundering and the controls in place within the business
- We know the identity of our Members/Assureds, their directors and controllers, including beneficial ownership of companies and trusts where applicable
- We are able to confirm the source of funds if a payment is received from an account in a name other than the Member/Assured/ service provider
- We report suspicions of money laundering arising to the correct authorities in compliance with statutory requirements