A 2022 article warning private schools and universities that appeared on the law firm website Withersworldwide is worth noting. It warns private schools and universities that they are at particular risk of receiving the proceeds of bribery and corruption and legitimising them. These warnings also extend to the possibility of financing terrorism.
Anyone in a senior management position and, in particular, responsible for the financial side of a private school or university should ask themselves the following (non-exhaustive list of) ‘red flag’ questions about a payment:
- Is the payer native to, or resident in, a high-risk country?
- Are the funds coming from a foreign bank account?
- Is the payer a Politically Exposed Person (see Section 37 (10) of the Criminal Justice (Money Laundering & Terrorist Financing) Acts 2010 to 2021), subject to sanctions or designated as (or associated with) a proscribed organisation?
- Are the funds part of a complex or illogical arrangement, such that it is unclear who is making the payment, e.g. from an offshore company?
- Has the payer taken steps to conceal their identity? Has anyone in the organisation ever met the payer in person?
- Are the payer’s assets inconsistent with their known legitimate income?
- Is the payment made up of a disproportionate amount of private funding, bearer’s cheques or cash?
- Are significant amounts being offered (unnecessarily) in advance or is the school or university being put under pressure to complete the transaction quickly without good justification?
- Is any of the information provided by the payer suspicious (e.g. falsified) or has information been withheld?
- Is a refund being requested for an overpayment (and if so, to different accounts)?
Sometimes the answers to these questions will be perfectly reasonable and innocent. Remain on the alert to the potential ML and terrorism risks where the source of funds is unclear or concerning, especially where a payment would tick more than one of the boxes listed above.
For more on AML please see our Anti-Money Laundering Policies Controls and Procedures Manual on our website. — View the table of contents here.
Please go to our website to see our:
- Anti-Money Laundering Policies Controls and Procedures Manual (March 2022) — View the table of contents
- AML Webinar (December 2023) available here, which accompanies the AML Manual. It explains the latest legal AML reporting position for accountancy firms and includes a quiz. Upon completion you receive a CPD certificate for attendance in your inbox.
- Letters of engagement and similar templates—Please visit our website here where immediate downloads are available in Word format. A bulk discount is available for orders of five or more items bought together.
- ISQM TOOLKIT, or if you prefer to chat through the different audit risks and potential appropriate responses presented by this new standard, please contact John McCarthy FCA by email at john@jmcc.ie.
- We typically tailor ISQM training and brainstorming sessions to suit your firm’s unique requirements. The ISQM TOOLKIT 2022 is available to purchase here.
