Working Safely during COVID-19 in shops and branches

The Department for Business, Energy and Industrial Strategy (BEIS) has issued Guidance for employers, employees and the self-employed.

Purpose

“This document is to help employers, employees and the self-employed in the UK understand how to work safely during the COVID-19 pandemic, keeping as many people as possible 2 metres apart from those they do not live with.”

Scope

The guidance is targeted at “shops and branches”. “Branches include bank branches, post offices and other open money businesses.”

Elements

Firms should work through the guidance note, step by step.

1. Risk
2. Who should go to work
3. Social distancing
4. Customers, visitors and contractors
5. Cleaning
6. PPE
7. Workforce
8. Inbound and Outbound goods

Assuming that firms can do so safely – then they should prepare to open on June 15th – a huge relief. The first task is to download the guidance, read it and start thinking about how best to complete a risk assessment.

Need help?

Keeping Up-to-date

2018 was a busy year for Lime. In addition to looking after clients, Stuart got re-certified in Anti Money Laundering by the International Compliance Association (ICA) and attended the Annual Conference in London. The ICA runs multiple events, seminars and webinars as part of their BIG Compliance Conversation.

Keeping up-to-date is an important part of the compliance world. Regulation and guidance is constantly evolving, and of course, the bad guys don’t stand still either.

As well as being a Fellow of the ICA, Stuart has now joined the Association of Certified Anti Money-laundering Specialists (ACAMS). In February, he will be attending their Anti Financial Crime Symposium in Cyprus. (A hard life, isn’t it?)

Lime keeps on top of developments at a supra-national, national and sector basis. Supporting our clients means keeping them informed of what’s changing that is relevant, and what’s changing that isn’t.

For most people, an entire day talking compliance is a particularly cruel version of hell. That’s why we do it for them. Don’t tell anyone, but Stuart can happily geek out on the minutiae of anti money laundering policies for hours at a time.

Have you tested your policies and procedures? Having nice manuals is one thing, but are they followed? Lime conducts stress tests to establish what is actually happening at the coal face. Regulators and Bank partners alike are big fans of these. They provide comfort that Firms are on top of their game.

If you are concerned that your AML policies and procedures might not be as up-to-date as they should be, get in touch. We’re more than happy to have a confidential and free chat.

Sanctions: In, out, in, out, shake it all about.

In June, I wrote about the conflicting advice on sanctions and specifically on dealing with Iran.

A couple of months later, the international community will surely have sorted that out.

Ah.

Not exactly. Federica Mogherini, the EU’s high representative for foreign affairs, said Brussels would not let the 2015 agreement with Tehran die, and she urged European firms to make their own investment decisions and continue to work with Iran. She said this only hours after President Trump had tweeted;

“The Iran sanctions have officially been cast. These are the most biting sanctions ever imposed, and in November they ratchet up to yet another level. Anyone doing business with Iran will NOT be doing business with the United States. I am asking for WORLD PEACE, nothing less!”

So, how would European firms react to this conflicting advice?

Well, the very same day, Daimler announced that it would be discontinuing its very limited activity in Iran.

Hardly surprising really. Who would risk being excluded from the US?

Sanctions legislation and advice can be complicated. Getting it wrong can be catastrophic. Worried how you stand? Give Lime a call and we can talk it through.

Stop Press. Banks charge fees!

Card Fees. Annually, the BBC recycles a story on foreign ‘plastic’ spending by UK travellers and the fees they pay.

The latest iteration was last week. I caught it on the evening news, and at the time of writing, it remains on the internet.

The article even links back to last year’s version, written by the same journalist. Last year, Amsterdam, this year Malaga. I wonder where he’s off to next year?

The thrust of the piece is that consumers don’t know that they are paying up to 3% fees on card transactions abroad. When the BBC provided them with this information, holidaymakers were outraged. The BBC asked FairFX, foreign exchange specialists to analyse the figures.

FairFX is one of many foreign exchange companies founded specifically to compete with the banks. I’m not sure I would choose a direct competitor for an even-handed analysis. (That said, I have heard only good things about the company.)

Charges

However, the analysis seems focused exclusively on charges, ignoring FX spread, which may be much more substantial that the fee. As I consumer, I’m less interested in how the margin is extracted, through fee or spread, and more in the final result, ie how many ‘dingalings’ I get net, per pound.

The piece felt lazy to me.

Finally, most irritating to me, is the failure to explore what all this means. Are the banks ruthlessly profiteering? Do consumers not accept that banks are businesses, motivated by profit? Are financial companies unfairly singled out on margins?

These are the questions that I believe would benefit from some scrutiny.

Margin

In conclusion, I am most interested in consumer perception of margin. I started in financial services behind the counter of a bureau de change in Paris. I was, and remain, fascinated as to why consumers would be outraged by a 10% commission on a financial transaction, and then happily pay ten times that margin on a coffee next door.

Why is that?

Recertified

Several years ago, I undertook not one, but two diplomas with International Compliance Training (ICT). First in anti money laundering (AML). I have to admit; it was hard work.

Studying

I hadn’t done any studying in a long time. If I wanted to know something that couldn’t be found in a few clicks on Google, then I could delegate the task to my team. They could go and find anything that I needed.

Therefore, going back to school came as a bit of a shock to the system. There were lectures, seminars and books to read. Hell, I even had to write papers and sit an exam.

Gradually, I began to enjoy studying. It was fascinating to hear real life examples and spend time with other people working in the field.

Eventually, I graduated, and was allowed to append ‘Dip. (AML)’ to my name on the business card.

As my company grew, new products were launched and regulation increased. I felt it was time to take on some more study. I registered for the diploma in Financial Crime Prevention (FCP).

Again, I made it through, this time appending ‘Dip. (FCP)’

Consequently, with two diplomas, (shouldn’t that be diplomae?), I was eligible to become a Fellow of the International Compliance Association. Acronym heaven!

Stuart Lennon, FICA, Dip. (AML) (FCP)

Recertified

A characteristic of this field (apart from the constant proliferation of acronyms), is its constant evolution. New products, new regulation and of course, new ways of circumventing that regulation. Therefore, I was delighted when last year, ICT published that it was to begin a recertification programme.

Immediately, I signed up. Then attended a day’s training and wrote a new paper.

Yesterday, a day or two early, ICT sent an email telling me that I had passed.

I’m recertified.

Or maybe just certifiable.

Lime offers no nonsense, straight forward compliance consultancy. Get in touch.

De-risking – an epidemic?

I was talking to an estate agent. He was negotiating his exit from his current firm to set up on his own.

“All going smoothly?” I asked.

“Well, apart from the Bank.”

I assumed that the Bank was exercising caution over extending a loan to a new business.

“No, they are happy to lend me money, but I don’t need any. They won’t give me a client account. Something to do with money laundering.”

Client Accounts

If you want to be a registered letting agent, then you need a client account, so that you can keep money received from tenants, for landlords, separate from your own money, used to run the business. Eminently sensible, one might think. Certainly reassuring for landlords and tenants.

However, the virus that is de-risking is spreading. That anti money-laundering regulation be applied to estate agency seems logical and correct. Now, how a bank is considering that there is more risk with un-segregated funds than with segregated ones is a mystery. Surely there would be more transparency with separated monies?

De-risking

It seems that we are seeing the trickle-down the de-risking that impacted Money Service Businesses (MSBs) over the last few years. This phenomenon has driven legitimate MSBs underground and out of business. There are legitimate, straight-forward businesses in the UK holding bank account in multiple European countries to protect themselves against sudden, categoric account closure. Madness.

Increasingly, there is acceptance that Banks are defending themselves not against money laundering risk but against regulatory risk. While American prosecutors wielding extra-territorial legislation dish out huge fines and pat each other on the back, the banks are quietly, ruthlessly withdrawing banking services for more and more sectors.

Surely, the world will turn, and these sectors will find ways to persist. Undoubtedly, in so doing, their dealings will be more opaque and quite probably this will be to the detriment of consumers.

Who knew that anti money laundering legislation was going to do that?

Your first defence against derisking is to have robust policies and procedures for anti money laundering. Get in touch for a free consultation. Maybe we can help.

When consensus fails.

I wrote here in thanks for the antics of “The Donald”, which served as a useful way of engaging an audience that otherwise was less than enthused by AML Compliance Training.

However, his new, combative approach to, well, pretty much everything, does undermine the concept of international consensus being at the core of the global fight against money laundering, terrorist financing and proliferation.

Or does it?

I argue that since 9/11 the US has been very open about ignoring everyone else. The Patriot Act established extra-territoriality, and as the NatWest 4 would attest, the Deferred Prosecution Agreement (DPA) is a powerful tool.

The US approach to financial regulation has always been “it’s our way, or the highway” and an emboldened EU seems keen to emulate approach, even if in opposition to the American stance.

Hence the curious position at the time of writing, with the US prohibiting trade with Iran as the EU promotes it.

Who would be an international financial firm these days?

Need some help navigating the complexity of international regulation? Give us a call.

Donald. Saviour of refresher training?

Next week, I am delivering refresher training to some counter-staff of a MSB.

At the start of the session, I ask the delegates for any real of concern or topics that they would like to see covered.

Almost certainly, I’ll be swept away by an onrushing tide of silence.

Let’s face it, few counter-staff are counting down the days until their AML refresher course.

To make things worse, I’m the last thing between these guys and a company-funded adult beverage or two.

Thank the Lord then, for the gift that is, “The Donald.” The orange-man’s current high-profile adventures almost make sanctions worth talking about. A couple of leading questions about North Korea and Iran, and I’ll soon have the delegates contributing, talking and possibly even laughing.

My job will be to harness this engagement and carry it through into explanation of PSD II, MLR 2017, and the coming joys of AMLD V and AMLD VI. As enthusiasm inevitably wanes, I will fall back on PEP’s, (guaranteed to wind up counter-staff), or failing that, the impact of Brexit on financial regulation.

Presumably, at some point, “The Donald” will be gone. Literally or figuratively. Less certain, but possible, is that somebody important will remark:

“This PEP thing. It really is useless, isn’t it? Shall we start again?”

Undoubtedly, such developments will be good for the world, but they will make designing and delivering engaging refresher training that little bit harder.

 

Engaging training? Would that benefit your company? Get in touch.

Compliance Frameworks for MSB

The very thought of a compliance framework can be enough to make a SME owner sigh.

Regulations are written to cover all sizes of entities, and it can be difficult to work out how they can be applied to a company with very few staff and no departments.

Nevertheless, regardless of size, every regulated entity must be compliant and able to evidence its compliance.

This needn’t be intimidating or difficult. Take anti money laundering, for example.

1. Have a policy. Write down what you are going to do and why. There is always guidance available and advice can be sought from trade associations as well as consultants.
2. Do a Risk Assessment. Work out where you business is at risk of being used for money laundering. Think about your products, your customers and your geography.
3. On the basis of your policy and risk assessment, write procedures. If the policy is ‘what?’ and ‘why?’, then the procedures are ‘how?’. How will your business manage and mitigate its risk?
4. Now you have a policy, a risk assessment and a set of procedures. Tell your staff about them. Train them. Make sure that they understand the policy. Make sure that they understand their responsibilities. At the end of the training, give them a test to check their understanding. Document the training and the test.
5. Every year, or if there is a significant change in your business, or the regulations, review everything from point 1 onwards, and document that you have done so.

All this documenting is your protection. If a regulator or a law enforcement agent is inspecting you, this is what makes them feel better.

Documenting evidence that you have real, living policies and procedures that are risk-based, that are understood by everyone in your business and that you review regularly.

Compliance doesn’t need to be complicated, difficult or intimidating.

If you want to talk through Compliance Frameworks and how to implement them, drop us an email, or give us a call for a confidential, free and, no obligation chat.

We’re happy to give free advice, or more if you want hands-on support.

HMRC MSB Review

More properly, the title is;

‘HM Revenue and Customs AML/CTF Thematic Review of anti-money laundering compliance in the Money Service Business.

The report in itself is worth reading, but my interest was piqued by the following;

‘Due to concerns that MSBs may be easily abused by criminals and terrorist financiers, some banks have withdrawn services from them as they do not wish to run the risk of regulatory action’.

Those pesky criminals and terrorist financiers; have they no respect for the law?

The review continues;

‘The FCA published a report on the drivers and impacts of de-risking, written by John Howell & Co. That report is available on the FCA website’.

It is, indeed available on the website. All 73 pages of it.

The report has contents, a glossary of acronyms and an introduction. Section 2 begins by setting the scene before moving onto the ‘Drivers of De-risking’.

‘Many banks told us that they needed to lower their overall risk ‘profile’ to realign their business and that they are paying closer attention to compliance since the global financial crisis. Further, we fear that de-risking is partly a result of the higher costs of compliance and the increased amount of regulatory capital now required, and partly a response to criminal, civil and regulatory actions. These include regulatory settlements, including Deferred Prosecution Agreements (DPAs), especially those reacted in response to AML/CFT failings.’

Abused by criminals and terrorist financiers, and culled by banks lowering their overall risks and cutting costs, who would be a MSB?

That apart, has all of this honest and diligent investigation moved MSBs forward at all?

In a word, No.

Whether it be the fear of crime, the fear of regulatory action, or simply good old fashioned cost/benefit analysis, the major clearing banks show no enthusiasm for banking the MSB sector.

Were it not so serious, it would be funny. Banks, regulators, law enforcement agencies and politicians are gathered in a virtuous circle, each pointing at the next one along.

In the meantime, proper, correct businesses are going to the wall, or underground.

I’m sure that the criminals and terrorist financiers must be devastated that these vulnerable MSBs that remain now operate only in the shadows.