To close our series on the AMLD4 and AMLD5 directives, it seems important to me to mention the situation where the professional realises that he is clearly facing a case of money laundering, or even terrorist financing, and in which a suspicious transaction report must be made.
Having experienced this kind of situation in the past, I must say that realizing that you are in such a position causes a psychological shock. It is the feeling of having been abused, despite all the AML measures we have been able to take. And if we have been close to the person responsible for this situation, this feeling is all the more reinforced.
The important thing is to remain professional. We must have the courage and lucidity to overcome this very human feeling of guilt and consider the situation coldly. There is a proven offence and it must be treated as such, without weakness.
It is chapter IV of AMLD4 that deals with reporting obligations.
Reporting of suspicions
The professional who has acquired the conviction that he is facing a situation of money laundering or terrorist financing must, as soon as possible, issue a suspicious transaction report to the Financial Intelligence Unit (FIU) of his country, providing as much information as possible on the case concerned.
Burying one’s head in the sand and saying that we have not seen anything indicates that the professional’s AML procedures are deficient, it is a terrible signal given to the outside world. The same applies if one decides to minimize or forget a criminal situation. This is the worst attitude because the professional can then be considered an accomplice to the offence.
Some important clarifications regarding the relationship with the FIU
Consider that once the file has been forwarded to the FIU, you no longer have to intervene in it, unless you receive new information or a written notification from the FIU, which will tell you what to do.
If the client asks the professional to carry out a transaction that the latter believes is a money laundering offence, it is the professional’s responsibility to suspend execution and immediately inform the FIU.
It is strictly forbidden for the professional (and his collaborators) to report, in any way and to anyone, the existence of a suspicion of a criminal operation as well as contacts with the FIU. Above all, it is essential not to inform the client of the approach towards the FIU and not to interrupt the relationship.
It goes without saying that the FIU, for its part, treats all information received from the professional in the most confidential manner.
When a case is closed by the FIU, it informs the professional of the outcome of the case in very general terms. At this stage, it is up to the professional to break off the relationship with the client or not. If there is a break, keep in mind that it is still not possible to refer to the relationships that have existed with the FIU and to any information that could have been collected in this context.
Failure to comply with the provisions of the 4th and 5th Directives is punished by very serious measures. Article 59 of the AMLD4 provides for sanctions of at least twice the amount of the benefit received by the trader. For the sanctions applicable in the country’s own jurisdiction, reference should be made to the country’s legal transposition texts.
Beyond the sanctions themselves, imposed by public bodies, it is necessary to take into consideration the media risk to which the professional could be exposed if he or she were splashed by a money laundering or terrorist financing case. Enough to instantly destroy a reputation acquired through years of work! Sanctions may also come from professional bodies which are entitled to blame, temporarily or permanently suspend the professional’s activity.
Archiving and storage
Please note that all documents and documents relating to AML work must be kept by the professional for 5 years, after the end of the relationship. This archiving obligation is also important and conditions the effectiveness of judicial investigations that could take place after the end of the relationship with the client.
We thus close our general overview of AMLD4 & AMLD5. The news regarding the register of Ultimate Beneficiaries is still rich and I have in preparation, for your attention in the coming weeks, a series of posts on this subject. Thank you for reading.