Sub Contracting Work and Money Laundering

System

I run a payroll, taxation and employment rights consultancy on a business to business basis (at the moment) and have recently come across an interesting demand from one of the agencies for whom I have carried out assignments.

Despite being an incorporated business and having just completed a big assignment for them with one of their clients they have asked for documentation which proves I am who I say I am and live where I say I live.

When I hesitated to provide this information I pointed out that their contractual arrangement is with my company, not me and therefore my personal data was irrelevant to them. Only my company could provide the data and since there is no law which states an employer has to hold data such as personal address there was, in my view, a difficulty in complying with their request.

Their counter argument is that they are required to do this under the money laundering and proceeds of crime legislation and that the national crime squad had advised them to carry this checking out.

Has anyone else met this situation and does anyone know a lot more about money laundering and proceeds of crime than I do? My research shows that only certain types of financial institutions are listed in the acts and so my supply of services would not be covered, but there may be other aspects I am not aware of.

Any assistance fellow colleagues can give would be most welcome.

Ian Whyteside, FMAAT, MIPP, MInstLM

System

Re:Sub Contracting Work and Money Laundering

Hello Ian.

I would recommend ringing your local NCIS office - they have advisors who should be able to help.

Regards.

Scott.

System

Re:Sub Contracting Work and Money Laundering

Scotty,

Thank you for that, it was one of my options but i hadn't done anything on that front yet.

What I have done is written to the Information Commissioners Office to see what the reaction there is.

You have confirmed to me that the NCIS exists though, I had a few problems tracking that down, but I think, having seen your response, I will now do so as a matter of urgency.

Interestingly if you combine the total views of this matter in all the forums i have posted it it seems as though nearly a thousand people have read it but only two so far have had any idea of a response.

I like the idea that I can post such an intruiging question but I am very concerned that it is so difficult to get a definitive answer. The contracting company i deal with have no answers, they are merely doing what their solicitors advise them.

System

Re:Sub Contracting Work and Money Laundering

Hi Ian

The lack of response you appear to be getting is probably down to the fact that people are thinking "well, he must have something to hide" and also the very sensitive nature of the question you are asking!

The request of your personal identification is perfectly reasonable.

Your company in this effect is the 'client' to the agency much like you have your own individual clients, which presumably you have 'money laundering' procedures in place? The agency is still required to 'money launder' it's clients' but they way in which it is done to companies is by laundering the individual who has 'control' of that company, if a company has two or more people with an equal amount of control the agency will launder all of those participants.

I haven't looked at the AAT's guidance on this but I can point you in the direction of the ATT & CIOT which you would do well to have a look at - it'll save you a telephone call at the very least.

Guidance can be found here:
http://www.tax.org.uk/attach.pl/2299/1275/CIOTATT anti money laundering guidance FINAL1 010304.pdf

If you have a look at appendix 1 that should provide you with the answers you are looking for.

I hope this resolves your problem.

Regards

Dean

System

Re:Sub Contracting Work and Money Laundering

double post

System

Re:Sub Contracting Work and Money Laundering

Thank you Dean, it is an interesting document but, regretfully, leaves me still puzzled.

I have written to the information commissioners office to see if i can obtain some clarification on my rights as an individual. Since i lecture on data protection issues i actually know what the answer will be.

The problem I have is that my client is seeking identification information from me and the document suggests it is me who should be insisting on identification from them, yet when you examine the act, the money laundering regs, my business does not fall into any of the categories listed as required to carry out investigation of any kind.

My other concern is that my client seems completely disinterested in the identification of our other director yet the rules make it clear that if the transaction falls into the required category, which in this case does not, someone has to carry out identification investigations into all those with a controlling interest.

If this organisation is right then we all will need to hold personal identification data on every partner and director of every company we deal with, so does that include BT, Scottish Power, stationary suppliers etc?

I am convinced they are completely misinterpreting the requirements because when my company was set up the person who did it carried out identification checks and when the company bank accounts were set up the bank did the same, even to the point of examining personal identification documentation on the person who temporarily held the shares before control passed to us. i fail to understand why we have to go through this all over again and the CIoT/ATT document, I feel, does not totally answer the questions.

Ian Whyteside