Anti-Money Laundering And Counter Terrorist Financing Policy 2019-2020

Anti-Money Laundering And Counter Terrorist Financing Policy 2019-2020

The objective of this policy is to prevent opportunities for money laundering activity to occur within our businesses. Reed Autos (“the Company”), through its Audit Committee, assesses the risk of our businesses being used to launder money or fund terrorism, and sets the approach for mitigating and effectively managing the risks identified. All team members have an obligation to familiarize themselves with this policy, which details our procedures for the identification and prevention of money laundering and terrorist financing. At all times, business should be conducted in a manner such that the opportunity and incidence of money laundering is prevented or mitigated to the greatest possible extent. The directors consider that appropriate guidelines and procedures should be set out across all businesses to enable team members to prevent money laundering occurring, identify potential incidences of money laundering and report suspected money laundering. This policy has been revised following The Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017 which came into force on 26 June 2017.

MONEY LAUNDERING - DEALERSHIPS IN THE UK

Vehicle purchases or purchases of high value parts and accessories provide an obvious opportunity for money laundering activity, given the high value of transactions. The term “money laundering” is broadly defined as: -

  • Assisting persons to retain the proceeds of criminal conduct;
  • Enabling the person to acquire property (including money, all forms of property, real or personal) from the proceeds of criminal conduct;
  • Concealing, disguising or transferring the proceeds of criminal conduct; or,
  • Acquiring, possessing or using the proceeds of criminal conduct.

Whilst the selling of a vehicle in itself to a criminal is not illegal, the money used to finance the sale may have been illegally obtained, with the criminal attempting to “wash” or “launder” the money through a business, for example by purchasing and re-selling a vehicle or multiple vehicles.

For example, signs of unusual conduct would be:

  • The customer is unusually secretive about personal details required for test drive forms or the purchase contract
  • The dealership is asked to invoice to a person/party which is different to the original person believe to be the customer
  • If the customer has no UK address or gives an accommodation address, or an address which turn out to be false.

IDENTIFYING THE CLIENT

For every transaction at Reed Autos, our team members must be satisfied with the identity of a customer, i.e. that the customer is who he says he is. In identifying the customer, the team members request to see:

  • Either (a) the photo page of the customer’s passport, or (b) photo driving license; or
  • A recent utility bill or bank/building society statement or letter, displaying the customer’s UK address or, if an overseas address, an address that is consistent with that on the customer’s passport.

WHAT FINANCIAL AMOUNT SHOULD AROUSE SUSPICION?

The circumstances of a transaction are more important than an amount of cash changing hands. To this end, being vigilant and looking for unusual payment methods or unusual conduct. Our Team members should always request payment in cleared funds, i.e. Via a debit card or electronic transfer to dealership bank account from a recognized bank. We try and avoid taking payment in cash sums. In circumstances where payment in cash cannot be avoided, or a cash sum has been received, the total cash payment should not be higher than £8,500. Acceptance of cash sums greater than £8,500 is not permitted and may result in the Company being fined and/or our team member being liable to criminal prosecution. This is because we have stated to the authorities that we do not accept sums above this amount. We have not registered any of our businesses as a “high value dealer” able to accept such amounts. Our team members are reminded that the acceptance of a cash sum just under the £8,500 threshold, or the acceptance of a series of smaller cash sums as part of an overall payment may also indicate money laundering. Such transactions should again be avoided.

REPORTING A SUSPICION OF MONEY LAUNDERING

If one of our team members knows or suspects money laundering, the Dealer Principal should be immediately informed, and a Money Laundering Notification Form should be immediately completed and submitted to the Legal Department at Neway House. The Legal Department will then review the circumstances and decide whether to report the matter to the National Crime Agency (NCA) through the suspicious activity reporting system (SARS). The NCA will decide whether any further action is appropriate.

PREVENTION THROUGH VIGILANCE

The best defence against money laundering remains the vigilance of our team members. Identifying suspected money laundering is very much a matter of personal judgement. However, team members will be required to carry out the following “checks” on each transaction: -

  • Is there anything unusual about the way the customer wishes to pay for his purchase?
  • Is there anything unusual about the customer’s conduct or behavior at the dealership?

EXAMPLES OF UNUSUAL PAYMENT METHODS

  • Customer wishes to pay in a single cash sum or series of cash sums;
  • Customer would like to make many financial transfers to the dealership from different accounts;
  • Customer produces cheques from several different accounts. (Reed Autos only accept building society cheques)
  • Customer’s unusual behavior regarding when the money will become available;
  • Named customer is not the same signatory as on the payment card or cheques to the dealership;
  • Customer claims the transaction is being performed on behalf of a friend or family member whose identity you are unsure of;
  • Customer requests details of dealership bank account and states they will deposit money into the account at branch.