Anti-money laundering in insolvency

Start with scope and risk

Identify the relevant regulated activity, the firm’s supervisor and the services being provided. Maintain a documented business-wide assessment and a proportionate assessment of the engagement. Money laundering, terrorist financing and proliferation financing risks need appropriate consideration.

Look beyond the company name. Ownership and control, geography, the nature of the business, connected parties and the route by which money enters the estate may change the assessment. Urgency does not remove the need to record the basis for decisions.

Understand the people and the money

Establish whose identity and beneficial ownership must be verified and what reliable evidence is required. Apply enhanced measures where the relevant rules require them. A Companies House entry or an identity check is one piece of evidence; it does not answer every AML question.

• Record the purpose and expected nature of the work.
• Understand material third-party funding, asset purchases and connected transactions.
• Resolve inconsistencies and keep an audit trail of the assessment.

Keep the assessment alive

Unexpected payments, historic transactions and explanations obtained during investigations may require reassessment. Relevant controls include staff training, escalation arrangements, record retention and appropriate oversight.

Suspected criminal property may require a separate report through the NCA regime and consideration of a defence before a proposed act. The linked SAR guide explains that route. Do not include a suspicious activity report in ordinary creditor correspondence.

Northern Ireland: source route

The AML framework is UK-wide, including Northern Ireland. Insolvency powers and procedure are governed by the locally applicable legislation, including the Insolvency (Northern Ireland) Order 1989 and Rules. Identify the supervisor and the actual regulated service; a Great Britain procedure guide cannot establish every local insolvency power.