Although many are familiar with background checks, only some know how they are used when counteracting money laundering. Anti-Money-Laundering Checks are also known as AML Checks and are designed to protect businesses from fraudulent investors.
What Is an Anti-Money Laundering Check?
An Anti-Money Laundering Check is an identity assessment that confirms the person investing is who they say they are. Although investments allow businesses to grow, if AML Checks are not carried out, a company could be part of criminal behaviour without awareness.
What Is the Responsibility of a Business When Avoiding Money Laundering?
In addition to carrying out Anti-Money Laundering Checks, a business must maintain records to ensure circ*mstances don’t change. In some instances, those wishing to launder money may make genuine deposits or investments to build trust, only to manipulate the system later.
As such, a business also needs to amend risk assessment when circ*mstanced change and carry out due diligence if the level of business activity changes dramatically.
What Documents Are Needed for an Anti-Money Laundering Check?
To carry out an AML Check, investors must provide a driving license or current passport for photographic ID. Proof of address will also be needed and can consist of a council tax bill, utility, bank statement, NHS medical card, self-assessment or driving licence if it has not been used as a photographic ID.
Are Other Checks Carried Out?
To ensure that businesses can stay clear of criminal behaviour, checks will also be carried out to ensure documentation is genuine. Doing so ensures the Financial Conduct Authority (FCA) is satisfied that the necessary measures have been taken when minimising risk to a business and legitimate investor.
How Long Does an AML Check Take to Complete?
The time it takes for an AML Check to be complete can depend on several factors. For example, if the correct information is given in the first instance, then an AML Check may only take 24 hours.
However, there can be instances when the process can take a week or longer, especially when incorrect information is given.
Fortunately, there are ways of speeding up the process, such as employing the services of an external agency. Although there is a cost incurred when using these services, the streamlined nature of AML checks ensures there is no financial risk to a business, making the investment worthwhile.
What Other Steps Need to be Taken Regarding Anti-Money Laundering?
As well as carrying out background checks and reviewing changes in activity, it is also advisable to ensure a policy statement is in place. How a policy statement is created will depend on the nature of the business but should be used to educate all employees of the processes in place.
Detail can include the procedure that needs to be followed when carrying out background checks, and when to take action if there is suspicious financial activity occurring.
Although the concept of money laundering is a worrying one, those who take the correct measure and carry out the right background checks can be confident their business is safeguarded.
