When carrying out Anti-Money Laundering checks on clients, all regulated industries must identify PEPs and sanctioned individuals during onboarding, to comply with KYC and AML requirements.
In this post, we take a deep dive into what they are, who meets the criteria, and explore best practices for your firm, safeguarding you and your business from any financial or reputational perils.
What is a Politically Exposed Person?
A PEP is an individual who is or has been entrusted within a prominent public institution, making them susceptible to corruption. Under anti-money laundering legislation, if a client is identified as a PEP, enhanced due diligence (EDD) is required.
Who specifically classifies as a Politically Exposed Person?
Overall, the list of PEP individuals includes, but is not limited to, heads of states, heads of governments, ministers, MPs, members of high-level judicial bodies such as high courts, as well as family members and close business associates of all the above.
Based on Money Laundering Regulations and UK Government guidance, PEPs are listed into tiered categories depending on their role. For example, Heads of State and Government would be regarded as Tier 1 while mayors and members of local councils would be Tier 4. Under UK Government guidance the expectation is firms should be identifying Tier 1 & 2 PEPs as a minimum.
My firm has identified a PEP, should we cease working with them?
If your client has been flagged as a PEP, you should apply enhanced due diligence measures to the case. This will differ on a case-by-case basis, but this does not automatically mean you should cease business.
Law society guidance suggests you must:
- Get senior management approval for the business relationship
- Take adequate measures to establish the source of wealth and source of funds
- Closely monitor the business relationship throughout
If you know or suspect a money laundering offence is taking place, you must make a disclosure to your firm’s money laundering reporting officer (MLRO).
What about Sanctions?
In addition to enhanced due diligence, all firms are also required to ensure they are not working with sanctioned individuals.
Sanctions and sanctions lists serve as a critical safeguard against financial crime. Businesses use sanctions checks to prevent themselves from getting involved with sanctioned entities. This way, businesses not only avoid the risk of non-compliance fines but also safeguard their reputation in the process. Conducting both PEP and sanction checks is crucial for businesses to minimize the chances of engaging with high-risk individuals or entities and to maintain a robust due diligence process.
Where I can I find out more?
OneSearch AML empowers you to navigate the complexities of due diligence with ease. Our innovative technology simplifies the onboarding process, saving you valuable time without compromising security.
In the ever-evolving world of Anti-Money Laundering (AML), ongoing monitoring plays a crucial role in mitigating risks and ensuring compliance. This is especially true in the realm of conveyancing, where large sums of money are changing hands.
This coffee-break article aims to shed light on ongoing monitoring in AML for conveyancing within England and Wales.
What is ongoing monitoring in AML for conveyancing?
Ongoing monitoring is the continuous process of identifying, assessing, and mitigating money laundering risks throughout the conveyancing transaction. It involves regular reviews of customer due diligence, monitoring transactions for suspicious activity, and reporting any concerns to the authorities.
How often should ongoing monitoring be done?
There’s no one-size-fits-all answer to how often or how long you need to monitor your customers’ activity. Instead, regulations require ‘ongoing monitoring’ that adapts to each business relationship. This means regularly checking conveyancing transactions (and sometimes, where necessary, the source of funds) to see if they match your understanding of the customer, their business, and their risk level. Basically, the higher the risk, the deeper your ongoing monitoring should be.
We empower you to customize your monitoring for each customer, allowing you to focus on those who pose the highest risk.
When should ongoing monitoring take place?
Ongoing monitoring for AML in UK conveyancing should ideally happen throughout the entire client relationship, not just at the beginning.
Here are some key points to consider:
- Continual Basis: The Law Society recommends a system of file reviews or reminders to ensure ongoing monitoring is applied
- High-Risk Clients: All clients should be monitored, but those identified as high-risk require enhanced due diligence and more frequent monitoring
- Trigger Events: Specific situations can trigger the need for additional CDD checks, which essentially act as a form of ongoing monitoring. (Change of name, inconsistent transactions, reluctance to meet in person)
Why is ongoing monitoring important in conveyancing?
Conveyancing deals are particularly susceptible to money laundering due to the high transaction values and the involvement of various parties. Ongoing monitoring helps to:
- Identify suspicious activity: By regularly reviewing transactions and customer information, red flags like large cash payments, unusual source of funds, or inconsistencies can be identified and investigated
- Mitigate risks: Early detection of suspicious activity allows for taking timely action, such as seeking clarification from the customer, refusing the transaction, or reporting to the authorities
- Demonstrating compliance: Robust ongoing monitoring demonstrates to regulators that firms are taking AML obligations seriously and have measures in place to combat financial crime
How can I implement ongoing monitoring in my conveyancing practice?
Here are some steps you can take:
- Develop a risk assessment: Identify the ML risks specific to your practice and tailor your monitoring procedures accordingly
- Train your staff: Ensure your staff is aware of their AML obligations and how to identify and report suspicious activity
- Use technology: Consider using technology solutions to automate some aspects of monitoring, such as transaction monitoring and sanctions screening
- Seek professional advice: Consult with an AML expert for guidance on implementing effective monitoring procedures
What are some resources available to help me with ongoing monitoring / AML?
- The Law Society’s AML guidance: https://www.lawsociety.org.uk/topics/property/conveyancing
- The Financial Conduct Authority’s (FCA) AML guidance: https://www.fca.org.uk/
- HM Treasury’s guidance on SARs: https://www.nationalcrimeagency.gov.uk/what-we-do/crime-threats/money-laundering-and-illicit-finance/suspicious-activity-reports
Remote ID Verification is a method of confirming the identities of individuals such as clients or customers who are not physically present. Whereas antiquated methods of confirming identity required persons to be in the room as well as providing documents, the advancements of technology have meant authentication processes can now be carried out anywhere in the world.
In this blog, we’ll take a closer look at a faster, more accurate and more secure form of identity verification, and break down what each component is, and how they all add up to make the AML biometric verification process so much easier.
It starts with liveness detection…
What is liveness detection?
In remote identity verification the use of liveness detection is critical in preventing presentation attacks or “spoofs”. Essentially, it is to make sure the individual carrying out the test is a) real, and b) who they say they are.
Common spoofs include:
- Masks
- Photographs or digital prints
- Digital screens
- Video playbacks
There are two forms of liveness detection; Active and Passive.
- Active Liveness, where a user is instructed to perform an action, such as blink, move your head from side to side, or smile.
- Passive liveness works unnoticed in the background without requiring any additional steps from the user. It includes use of AI technology and deep neural networks to detect spoofs.
As passive liveness requires no response from the user, it is often the case that they occur without the user being aware a liveness check is taking place, let alone what security mechanism is being used. This reduces the risk of fraudulent access and identity theft.
What other examples are there in life of passive lifeless tests?
You may start noticing passive liveness tests in more and more in everyday activities, from airport security to mortgage applications.
- Facial recognition systems: Banks, airports, border control, and other security-sensitive applications
- Remote document verification: Online onboarding for financial services, healthcare, and other sectors
- Mobile authentication: Secure access to mobile apps and accounts
Passive liveness is a rapidly evolving technology with the potential to significantly enhance security and convenience in various applications.
Methods:
- Document verification: Uploading scans or photos of government-issued IDs and comparing them to official databases
- Facial recognition: Using a webcam or smartphone camera to capture a live image of the person and comparing it to the photo on their ID
- Knowledge-based authentication: Asking the person security questions based on information they are likely to know
- Third-party data verification: Checking the person’s information against public or private databases, with their consent
Join us on the 31st January at 2PM for a free webinar with our partners LMS to demo their confirmly platform, showcasing some of its key features.
Robin Wells, Head of Sales Operations at OneSearch, and Travis Scholes, Commercial Director at LMS will co-host this session, detailing the confirmly platform, its key features, and how your firm will benefit from this technology.
The webinar will run for around 30 minutes, with time at the end for any questions on confirmly, and how to get started. We will also be announcing an exciting incentive for OneSearch customers during this webinar.
If you haven’t yet had the chance to try confirmly, here are some of the reasons why others are switching:
- Law firm submitted data
Information is constantly updated and checked through 1000’s of direct interactions each year.
- Simple to search
Powerful search functionality that delivers information fast.
- Indemnified service
A trusted way to reduce transactional risks.
- Easy access
Seamless integration with OneSearch
- Reduce manual intervention without reducing risk
The latest technology keeps money transfers secure through the continual use of eCOT and checked bank account data.
For any questions on confirmly from LMS in the meantime, please contact intro@onesearchdirect.co.uk
FCI, the supplier of Chancel Check and Chancel Check Premium have recently imposed an increase of near 70% in the supply cost of their reports.
This increase has led to a significant price rise to both reports to enable us to continue to supply and support these reports for our customers. The new prices are listed below, and will start on the 7th November.
| Product Name | Increase in supply cost | Price After 7th November |
|---|---|---|
| ChancelCheck | +£8.20 | £31.20 |
| ChancelCheck Premium | +£32.40 | £118.40 |
We are now able to offer a low-cost alternative to our customers. Launching on the 7th November, Landmark Chancel Residential and Landmark Chancel Commercial are cost-effective screening reports designed to identify historical parishes where a continuing Chancel liability exists. You can find out more about these products by downloading the following Residential Product Card and Sample Reports:
Landmark Chancel Residential Product Card
Landmark Chancel Residential Sample Report
The prices of Landmark Chancel Residential and Landmark Chancel Commercial are as follows:
| Product Name | 0-5 Acres |
|---|---|
| Landmark Chancel Residential (ex. VAT) | £23.00 |
| Product Name | 0-3 Acres | 3-5 Acres | 5-20 Acres | 20-50 Acres | 50-200 Acres |
|---|---|---|---|---|---|
| Landmark Chancel Commercial (ex. VAT) | £26.00 | £35.00 | £46.00 | £78.00 | £165.00 |
If you have either the Chancel Check and Chancel Check Premium products as part of your customer bundle, we will automatically swap these to the more cost-effective Landmark Chancel products, and you don’t need to do anything.
Should you wish to keep the Chancel Check and Chancel Check Premium products in your bundle and are happy with the cost increase, please contact your account manager to arrange this.
To discuss your options please email intro@onesearchdirect.co.uk or get in touch with us on 0800 052 0117 and we will be more than happy to assist you.
We would like to draw your attention to a OneSearch product update.
We are making a modification to the way we display detailed highways information on our OneSearch Prime, OneSearch Prime Commercial, and OneSearch Duo products.
Previously, the adoption status for highways would be displayed showing carriageway, footway, footpath, and verge status.
Going forward, we will be displaying highways status information in a more simplified manner.
These changes are effective immediately. For any immediate questions, please get in touch with our Customer Services team on 0800 052 0117 and we will be more than happy to assist you.