In several recent blogs we looked at some examples of money laundering in practical day to day business life.
Here are some more examples from the latest Consultative Committee of Accountancy Bodies (CCAB) AML Guidance released on 4 March 2022.
Some customers of your client have overpaid their invoices. The client retains overpayments and credits them to the profit and loss account. Do I need to report this as money laundering or not?
Obviously the circumstances can vary and the CCAB guidance is not to be interpreted as giving legal and definitive advice. The scenarios outlined a merely there for the purposes of illustrative guidance and for educational purposes.
The circumstances will influence whether to report this matter for money laundering purposes or not.
Report the matter if you:
- know or suspect that the client intends to dishonestly retain the overpayments. Reasons for such a belief may include:
- The client omits overpayments from statements of account.
- The client credits the profit and loss account without making any attempt to contact the overpaying party.
You may not need to report the matter if you:
- believe that the client has no dishonest intent to permanently deprive the overpaying party. Reasons for such a belief may include:
- Systems operated by the client to notify the customer of overpayments.
- Evidence that requested repayments are processed promptly.
- Evidence that the client has attempted to contact the overpaying party.
- The client has sought and is following legal advice in respect of the overpayments.
These situations are not usually clear cut and legal and professional advice may be necessary to fully understand your obligations.
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