An FSA publication called 'Money Laundering Theme: tackling our new responsibilities' has ident...
An FSA publication called 'Money Laundering Theme: tackling our new responsibilities' has identified six areas of activity especially vulnerable to money laundering where the FSA plans to focus its attention. One of these areas of activity is IFAs and offshore funds.
According to the FSA, money laundering risks arise when IFAs deal with offshore funds. The FSA says IFAs often don't have the awareness required to detect and deal with suspicions of money laundering.
There are two key pieces of regulation that IFAs should know about, the Money Laundering Regulations 1993 and the FSA's new Anti Money Laundering rules, which will come into effect in November this year.
The Money Laundering Regulations is the law that governs money laundering in the UK and it is a criminal offence not to abide by it. It sets out how to identify and report money laundering. The FSA's Anti Money Laundering rules are similar to the law but it sets out particular requirements for the IFA such as identifying and knowing its customers and actions to be taken on suspicion of money laundering.
Patrick Humphris, spokesman for the FSA, said: "The FSA studied the whole area that it regulates and found that there are six particular areas of high risk. With IFAs in particular, the risk generates from dealing with offshore funds especially when cash purchases are involved. We feel that IFAs have got gaps in the their awareness of anti money laundering regulation and how they should deal with suspicions of money laundering."
The FSA hopes to aid the IFA sector by raising awareness through its industry training programme as well as direct mailing and helping to improve money laundering controls.
Tracey Mullins, Director of public affairs at The Association of Financial Advisers supported the awareness programme of the FSA saying: "It is a useful way of communicating information to IFAs about the offshore industry. There is room for improvement when it comes to raising the awareness and providing guidance to IFAs."
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