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Founded back in 1809, Thomas Flavell & Sons has a long and proud history in providing legal services for businesses and Individuals. Our loyal in-house team offer the highest level of care for all clients.
Thomas Flavell & Sons has offices throughout Leicestershire and Warwickshire, providing legal services for businesses and Individuals since 1809. Please select any office for directions and contact information.
Money Laundering, Terrorist Financing, Due Diligence, Proceeds of Crime Act, are all terms we hear a lot in conveyancing. When dealing with monetary transactions, such as house purchases we have very strict rules and regulations we have to comply with as conveyancers. Ensuring that we carry out the relevant checks on clients’ (and third party) finances and identity takes a lot of time and patience. We appreciate that having to ask our clients for bank statements, and enquiring as to their proof of wealth can seem intrusive, and clients are sometimes offended by this. However, establishing where a client’s money has come from is something we have to take very seriously. It is not just a tick box to show that we have asked the right questions, and obtained the right information, we have to keep in mind the reason these rules were put in place.
Say for example, we act for Joe Bloggs in his purchase of a £300,000 house. Mr Bloggs is not having a mortgage, and when we get close to completion, we ask Mr Bloggs for the £300,000 to be transferred to our bank. Mr Bloggs happily transfers money into our account and we complete on his purchase. 4 months later, Mr Bloggs sells the house, and the proceeds of sale are transferred to Mr Bloggs from a Solicitor’s firm, and his bank statement shows the credit as funds in from a Solicitor. This is now “clean money”. Or, Mr Bloggs transfers deposit money to us, and then decides not to buy the house. We have to reimburse his deposit, and again this will appear on his bank statement as being received from a firm of solicitors, and is therefore clean money. So whether the money is being used to purchase an asset, or as a payment into a solicitor’s bank account to simply be refunded, there is a risk that the solicitor/conveyancer is being used to clean “dirty money”.
The reasons these regulations are in place are not insignificant. They are serious, and quite frightening. You may wonder why one may need to clean their money? The reality is, if a person needs their money cleaning, this would mean that the money was almost definitely obtained by ill-gotten gains. The money could have been obtained by taking payments for human trafficking, trafficking people into the sex trade or into modern day slavery; from taking payment to help smuggle people (a lot of the time perilously) into a different country; it could be that the person needing to clean their money is a drug pusher and the money is payment for drugs. The proceeds of those crimes could also then be used to fund a terrorist organisation. The list is by no means exhaustive and, whilst we like to think that these thing do not take place, unfortunately they do, and they take lives every day.
Therefore, when we have to ask for further information in respect of a transfer of money into your bank account from 3 months ago; or we need to see further bank statements; or statements with your name and address on; or we ask someone gifting money to you towards your house purchase for copies of their bank statements, it is not because we are nosey, nor do we mean to seem intrusive or snooping into your spending habits. Nor are we insinuating that you have obtained money illegally. We simply have to carry out the relevant and sufficient checks on every client (even if we know you or you are an existing client) in order to comply with the regulations.
Criminals will find a way to launder their money but the purpose of the Regulations is to make it harder to do so. With Solicitor’s firms having to comply with Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, and regular audits by the Solicitors Regulation Authority to ensure that regulations are complied with, we do our bit to ensure that the criminals committing these crimes, find it ever more difficult to turn their proceeds of crime into clean money.