Posted by William Bartoli-Edwards, Paralegal
Private Schools facilitate illicit transactions?
As part of stepping up the enforcement of anti-money laundering legislation the Agency has notified private schools that they should file more Suspicious Activity Reports (“SAR”), flagging suspicions over the payment of fees.
The potential use of private schools as a way to launder funds was highlighted when Millfield school faced accusation that it had received payments connected to a £14bn money laundering operation in Moldova. Additionally, a former Nigerian state governor also used part of the £50m he fraudulently obtained to fund the £23,465 a year for each of his children to attend The Port Regis School. The UK’s attitude to monitoring financial activity is changing, already resulting in a 14% decline in Russian pupils since 2016.
The Proceeds of Crime Act 2002 (“POCA”) is the primary legislation applied to schools. It includes offences for concealing, acquiring and using criminal proceeds and prejudicing an investigation. Commonly schools have relied on “adequate consideration” as a defence which covered tuition fees but not donations. However, there are four offences under s.329 and s.342 of POCA, of which adequate consideration is only a defence to one of them.
Schools are not required to nominate a Money Laundering and Proceeds of Crime officer (MLNO) to report suspicious activity, but they should monitor HM Treasury and EU notices on high-risk countries and submit reports where appropriate. Verifying ID, especially when dealing with politically exposed persons and customers from high-risk locations, can minimise the chances you will wash illicit money.
Most importantly, robust policies to monitor and report situations coupled with effective personnel training will increase awareness and reduce risk. Submitting an SAR can be done online in five steps and greatly supports investigations.
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