A series of webinars held by the The Financial Action Task Force (FATF), the global money laundering and terrorist financing watchdog, have outlined changed criminal behaviour due to the Coronavirus pandemic. FATF significantly influences the UK Government’s anti-money laundering policies and, subsequently, what rules and processes conveyancers must adhere to. The webinars highlighted how normal criminal activity has been disrupted whilst at the same time has increased opportunities available as a result of the lockdown.
The lack of travel opportunities and the closure of many cash rich businesses in the leisure sector has changed criminal behaviour with respect to money laundering. The lockdown has meant less paper cash being spent, so therefore, criminals have been finding new ways to use the cash that they have acquired from illegal activity, one way of doing this is to use cryptocurrencies. Criminals have been stock piling cash and potentially could acquire or support businesses and individuals that are under financial strain and pressurise them into laundering money. Pushing cash through the accounts of vulnerable businesses or individuals who are struggling financially heightens the need for conveyancers to consider the source of funds and question where the money comes from. With so many people still working from home it is of vital importance that control and training mechanisms are robust. As the furlough scheme and other government support packages come to an end in the autumn, this threat will increase.
Some of the steps to enhance due diligence include:
• Consider the source of funds especially where cryptocurrencies are involved.
• Be vigilant with email accounts and bank account details.
• Ensure AML training is appropriate and up to date.
• Cyber Essentials or ISO27001 may be appropriate as part of your cyber protection policy.
Colette Best, Director of Anti-Money Laundering, at the SRA, said: “We have published guidance for solicitors on upholding their money-laundering obligations in the current working environment. We have also seen firms targeted by cyber criminals trying to take advantage of those who are working at home for the first time. The National Crime Agency recorded a 400 per cent increase in cyber crime incidents in the first two weeks of lockdown alone. So, we have produced further resources on cyber crime to help keep firms safe.” An updated guide on evidence of identity has been published by HMLR.
With changing criminal behaviour, firms are advised to replace and update systems regularly, use antivirus software and ensure systems have appropriate firewalls. They should use two-factor authentication for email and log-ins where possible and make sure staff avoid predictable passwords. The Government backed Cyber Essentials scheme is one-way firms can help to guard against the most common cyber threats and demonstrate commitment to cyber security. Firms should have Cyber Essentials accreditation as a minimum to ensure up-to-date cyber defences. Redbrick Solutions is working towards Cyber Essentials Plus accreditation and Redbrick Solutions use the very latest technology to make the conveyancing process as efficient and secure as possible. We take a serious stance on fraud in order to offer as much protection to our clients as possible. Our document sharing portal has the highest level of security available using two-part authentication. This enables you to share sensitive data, such as bank details, with your client whilst removing the risk of email interception and fraud. Redbrick Solutions also provide full identity checks. All of our AML/ID checks are fully compliant with the FCA, HMRC and SRA. You can also choose to accept proof of ID electronically via our secure portal and make use of electronic signatures.