AWW UBO(1).pptx

# Anti-money laundering legislation and its structure Anti-money laundering legislation and its structure provides the foundational legal framework and procedural guidelines for preventing illicit financial activities. ## 1. Anti-money laundering legislation and its structure ### 1.1 Purpose and scope of the legislation The legislation aims to prevent money laundering and the financing of terrorism. It also includes provisions to limit the use of cash. The primary law discussed is the Law of 18 September 2017. This law is supplemented by norms and recommendations from professional bodies such as the Institute of Accountants and Tax Consultants (ITAA) and the Professional Institute of Accountants and Tax Advisors (BIBF) when specific decrees are still being finalized. ### 1.2 Structure of the Law of 18 September 2017 The law is structured into several books: * **Book I: General provisions:** This section defines key terms and outlines the scope of the law. * **Book II: Obligations of entities:** This book details the duties imposed on various professional entities. * **Book II/1: Processing of personal data:** This deals with data protection aspects related to AML/CTF measures. * **Book III: Restrictions on the use of cash:** This chapter specifies limits and prohibitions regarding cash transactions. * **Book IV: Competent authorities:** This section identifies the bodies responsible for supervision and enforcement. * **Book V: Sanctions:** This outlines the penalties for non-compliance. * **Book VI: Transitional and amendment provisions:** This covers the implementation and modifications to the law. ### 1.3 Definitions #### 1.3.1 Money laundering Money laundering is defined as: 1. The conversion or transfer of money or other goods, knowing that they were derived from a criminal activity or participation in such activity, with the aim of concealing or disguising their illegal origin or helping a person involved in such activity to evade legal consequences. 2. Concealing or disguising the true nature, origin, location, disposal, movement, rights to, or ownership of money or goods, knowing that they were derived from a criminal activity or participation in such activity. 3. The acquisition, possession, or use of money or goods, knowing at the time of receipt that these items were derived from a criminal activity or participation in such activity. 4. Participation in, complicity in, attempted, aiding, abetting, facilitating, or advising with a view to committing any of the acts described in points 1, 2, and 3. #### 1.3.2 Financing of terrorism Financing of terrorism is defined as the provision or collection of funds and other assets, in any manner, directly or indirectly, with the aim that they be used or in the knowledge that they will be used, in whole or in part, by a terrorist organization, or by a terrorist acting alone, even without any connection to a specific terrorist act. #### 1.3.3 Ultimate beneficial owner (UBO) The "ultimate beneficial owner" refers to the natural person(s) who is/are the ultimate owner(s) of or has/have control over the client, the client's agent, or the beneficiary of life insurance agreements, and/or the natural person(s) on whose behalf a transaction is carried out or a business relationship is established. A UBO is always a natural person. ### 1.4 Applicability of the law The law applies to: * Auditors (members and trainees, natural and legal persons) * Certified accountants and tax advisors (members and trainees, natural and legal persons) * Accountants and fiscal accountants (members and trainees, natural and legal persons) * Persons providing tax services (from a separate ITAA list, natural and legal persons) ### 1.5 Norms and recommendations from professional bodies (IAB & BIBF) The norms and recommendations from professional bodies are structured around several key components: #### 1.5.1 General provisions This section likely covers the overarching principles and intent of the AML/CTF framework as applied by these professions. #### 1.5.2 Organization and internal control This mandates the establishment of internal control mechanisms, including: * **Mandatory internal control:** This involves documented and approved guidelines, procedures, and control measures. * **Key control areas:** Internal controls must cover aspects like client acceptance, suspicion reporting, and document retention. * **AMLCO appointment:** Every firm must appoint an Anti-Money Laundering Compliance Officer (AMLCO). * For firms with fewer than 10 professionals, one person can hold both AMLCO and highest-level responsible person roles, provided they are a professional. * For firms with more than 10 professionals, these roles must be held by two different individuals, with the highest-level responsible person always being a professional. * **AMLCO responsibilities:** The AMLCO oversees internal controls, reports unusual transactions, potentially reports to the Financial Crimes Enforcement Unit (CFI), and is responsible for staff training on AML procedures. * **Highest-level responsible person:** This individual is informed by the AMLCO about activities and risks and adjusts policy as needed. * **Notification:** The ITAA must be informed of the appointed AMLCO and highest-level responsible person; trainees cannot hold these positions. * **Whistleblowing:** A reporting channel must exist for alleged or proven breaches, ensuring anonymity, independence, and that reports do not go through a direct supervisor. #### 1.5.3 General risk assessment by the professional A risk assessment must be performed for each client. Different risk categories (e.g., low, moderate, high) need to be established. #### 1.5.4 Client vigilance and transactions This involves: * Developing a client acceptance policy. * Investigating the AML/CTF risks associated with the client's profile, including the purpose of the business relationship and the nature of services offered. * Implementing measures to monitor and manage identified risks. * Refusing clients who are unwilling to identify themselves or lack credibility. #### 1.5.5 Transaction investigation When red flags are identified ("knipperlicht"): * An internal report must be prepared. * The client must be informed in writing about the findings and potential penalties. * Repeated issues may lead to the client being classified as high risk. * Suspected or confirmed AML/CTF activities must be reported to the CFI. #### 1.5.6 Documentation and record-keeping The following documents must be retained for 10 years from the end of the business relationship or the date of the occasional transaction: * General risk assessment. * Identification data. * Proof of transactions. #### 1.5.7 Restrictions on the use of cash * **Prohibited for real estate purchases.** * **Payments or gifts exceeding 3,000 euros are prohibited**, with exceptions for transactions between private individuals or with banks. * Transactions related to money laundering or terrorist financing must be reported to the CFI. ### 1.6 UBO Register (Ultimate Beneficial Owner Register) The UBO register is a central register containing information on the ultimate beneficial owners of companies, (international) non-profit associations, foundations, trusts, and other legal entities similar to trusts. Its purpose is to identify who effectively stands behind a legal structure or economically benefits from it. #### 1.6.1 Categories of UBOs in companies For companies, UBOs are categorized into three groups: 1. Natural persons who directly or indirectly hold more than 25% of the voting rights or ownership interest in the capital. 2. One or more natural persons who have control through other means (e.g., the right to appoint or dismiss directors). 3. If the above cannot be identified, the ultimate beneficial owners are considered to be the senior management personnel. #### 1.6.2 Information to be reported for UBOs The following information must be provided: * First and last name * Date of birth * Nationality(ies) * Full residential address * Date of becoming a UBO * Identification number (e.g., National Register number or equivalent) * Category of UBO * For company UBOs: the (weighted) percentage of shares or voting rights in the reporting entity. #### 1.6.3 Direct and indirect UBOs * **Direct UBO:** A natural person who is directly the owner of or has control over the reporting entity. * **Indirect UBO:** A natural person who owns or controls the reporting entity through one or more intermediary legal entities. #### 1.6.4 Identification of indirect UBOs Indirect UBOs are identified through: 1. The weighted value of the participation in shares/voting rights via intermediary companies exceeding 25% in the reporting entity. 2. Ownership/control in an intermediary company (holding more than 50%) which itself has a stake/control of more than 25% in the reporting entity. > **Tip:** Understanding the distinction between direct and indirect UBOs is crucial for accurate reporting and due diligence. Always trace ownership chains until a natural person holding significant control or ownership is identified. --- # Internal control and risk assessment for professionals This topic outlines the mandatory internal control requirements and risk assessment obligations for professionals under anti-money laundering (AML) legislation. ### 2.1 General provisions and definitions The law defines "money laundering" and "financing of terrorism" to establish the scope of these criminal activities. * **Money Laundering:** Encompasses the conversion or transfer of funds or assets known to be derived from criminal activity, with the intent to conceal their illegal origin or assist those involved in evading legal consequences. It also includes concealing or disguising the nature, origin, location, disposition, movement, rights, or ownership of such funds or assets, as well as acquiring, possessing, or using them while knowing they are proceeds of criminal activity. Participation in, complicity with, attempt to commit, aiding, abetting, facilitating, or advising on such acts also constitute money laundering. * **Financing of Terrorism:** Defined as the provision or collection of funds and other assets, by any means, directly or indirectly, with the intent that they be used or with the knowledge that they will be used, in whole or in part, by a terrorist organization or by a terrorist acting alone. * **Ultimate Beneficial Owner (UBO):** Refers to the natural person(s) who ultimately owns or controls a client, or on whose behalf a transaction is conducted or a business relationship is entered into. The UBO is always a natural person. ### 2.2 Application of the law The law applies to various professionals, including: * Statutory auditors (members and trainees, natural and legal persons) * Certified accountants and tax advisors (members and trainees, natural and legal persons) * Accountants and fiscal accountants (members and trainees, natural and legal persons) * Persons providing tax services (as listed by the ITAA, natural and legal persons) ### 2.3 Norms and recommendations In addition to the law, professional institutes like the IAB (Instituut van de Accountants en de Belastingconsulenten) and BIBF (Beroepsinstituut van erkende Boekhouders en Fiscalisten) provide norms and recommendations for applying AML legislation. These norms typically cover: * General provisions * Internal control organization * General risk assessment by the professional * Customer due diligence and transaction monitoring * Transaction investigation * Documentation and record-keeping * Restrictions on cash use * Supervision and control ### 2.4 Organization of internal control Internal control measures are mandatory for all professionals and must be documented and approved by senior management. These measures should cover key areas such as client acceptance, reporting suspicions, and document retention. #### 2.4.1 Appointment of an AML Compliance Officer (AMLCO) Every professional office must appoint an AMLCO. * For offices with fewer than 10 professionals, both the AMLCO and the "responsible person at the highest level" can be the same person, who must be a professional. * For offices with more than 10 professionals, these roles must be held by two different individuals. The responsible person at the highest level must always be a professional. The AMLCO is responsible for: * Overseeing internal control measures. * Reporting atypical transactions. * Potentially reporting to the Financial Intelligence Unit (FIU) (referred to as CFI in the document). * Ensuring staff training on AML procedures. The responsible person at the highest level is informed by the AMLCO about activities and risks and is responsible for policy adjustments. The designated AMLCO and responsible person must be communicated to the ITAA, and neither can be a trainee. #### 2.4.2 Reporting channels (whistleblowing) A reporting channel, often referred to as whistleblowing, must be established for suspected or confirmed breaches of AML regulations. This reporting mechanism should ensure anonymity, independence, and that reports are not made through a direct supervisor. ### 2.5 General risk assessment by the professional Professionals are required to conduct a risk assessment for each client. These assessments should categorize clients into different risk levels, such as low, moderate, and high. ### 2.6 Customer due diligence and transaction monitoring Professionals must: * Develop a client acceptance policy. * Conduct an investigation into the money laundering and terrorist financing (ML/TF) risks associated with the client's profile, including the purpose of the business relationship and the nature of services offered. * Implement measures to monitor and manage identified risks. * Refuse clients who are unwilling to identify themselves or lack credibility. ### 2.7 Transaction investigation When red flags or suspicious activities are identified ("knipperlicht" - blinking light), professionals must: * Prepare an internal report. * Inform the client in writing about the findings. * Advise the client on potential penalties. * Classify the client as a higher risk if suspicious activity recurs. * Mandatorily report any suspicion of ML/TF and the underlying facts to the FIU. ### 2.8 Documentation and record-keeping Professionals must retain specific documents for a period of 10 years, starting from the end of the business relationship or the date of an occasional transaction. These documents include: * General risk assessments. * Identification data. * Evidence of transactions. ### 2.9 Restrictions on the use of cash There are restrictions on cash payments: * Prohibited for real estate purchases. * No payments or gifts exceeding three thousand euros are allowed, with exceptions for transactions between private individuals or with banks. * When cash transactions are linked to ML/TF, they must be reported to the FIU. ### 2.10 Ultimate Beneficial Owner (UBO) register The UBO register is a central register containing information on the ultimate beneficial owners of companies, associations, foundations, trusts, and other legal entities. Its purpose is to identify who truly stands behind a legal structure or benefits economically from it. #### 2.10.1 Identification of UBOs The UBO is defined as the natural person(s) who ultimately own or control the client, or on whose behalf a transaction is conducted or a business relationship is entered into. For companies, UBOs are categorized into three groups: 1. Natural persons who directly or indirectly hold more than 25% of the voting rights or capital ownership. 2. One or more natural persons who exercise control through other means (e.g., the right to appoint or dismiss directors). 3. If the above categories cannot be identified, the UBOs are considered to be the senior management personnel. #### 2.10.2 Information to be reported for UBOs The following information must be provided for UBOs: * Full name. * Date of birth. * Nationality(ies). * Full residential address. * Date on which the person became a UBO. * Identification number from the national register (or equivalent). * Category of UBO. * For UBOs of companies: the (weighted) percentage of shares or voting rights in the information-obliged entity. #### 2.10.3 Direct and indirect UBOs * **Direct UBO:** A natural person who is the direct owner or controller of the information-obliged entity. * **Indirect UBO:** A natural person who owns or controls the information-obliged entity through one or more intermediary legal entities. Identification of indirect UBOs involves assessing ownership or control of intermediary entities where the weighted value of participation in shares/voting rights via intermediaries exceeds 25% of the information-obliged entity, or where ownership/control in an intermediary entity (over 50%) holds a more than 25% interest/control in the information-obliged entity. --- # Client vigilance and transaction monitoring This section details the critical procedures for maintaining client vigilance and monitoring transactions to prevent money laundering and terrorist financing. ## 3. Client vigilance and transaction monitoring Effective client vigilance and transaction monitoring are cornerstones of anti-money laundering (AML) and counter-terrorist financing (CTF) frameworks, requiring professionals to implement robust policies and procedures. These measures are designed to identify, assess, and mitigate the risks associated with client relationships and the transactions they conduct. The overall norm for these procedures includes general provisions, organizational and internal control measures, risk assessments, client vigilance and transaction monitoring, investigation of transactions, documentation, cash usage limitations, and supervision. ### 3.1 Organization and internal control A fundamental aspect of client vigilance is establishing strong internal control mechanisms. This involves developing clear guidelines, procedures, and internal control measures that are documented and approved by the effective management. These internal controls must specifically address key areas such as client acceptance, the reporting of suspicions, and the meticulous retention of documents. #### 3.1.1 The role of the AML compliance officer Every professional office must appoint an Anti-Money Laundering Compliance Officer (AMLCO). This individual holds a senior-level responsibility within the organization. * For offices with fewer than 10 professionals, the AMLCO role can be combined with another function, provided the individual is a professional. * For offices with more than 10 professionals, two distinct individuals are required. One must be a professional responsible for the highest level of oversight. The AMLCO's responsibilities include overseeing internal control measures, preparing reports on atypical transactions, potentially reporting to the relevant financial intelligence unit (CFI), and ensuring personnel receive adequate training on AML procedures. The highest-level responsible person is kept informed by the AMLCO about ongoing activities and identified risks, and is empowered to adjust policies as necessary. The professional body (such as ITAA) must be notified of the appointed AMLCO and the highest-level responsible person; neither can be an intern. #### 3.1.2 Reporting of breaches A crucial element of internal control is the establishment of a confidential reporting channel, often referred to as whistleblowing. This channel must allow for the reporting of alleged or confirmed breaches of AML regulations. Reports should be handled anonymously, independently, and should not be routed through a direct supervisor. ### 3.2 Risk assessment of client profiles A comprehensive risk assessment is mandatory for each client. This assessment involves categorizing clients into different risk levels, such as low, medium, or high. This tiered approach allows for the application of appropriate vigilance measures based on the inherent risk associated with each client and their activities. ### 3.3 Client acceptance policy and ongoing vigilance A well-defined client acceptance policy is essential. Professionals must conduct an investigation into the money laundering and terrorist financing (ML/FT) risks associated with a client's profile. This includes understanding the purpose of the business relationship and the characteristics of the services being offered. Based on this investigation, appropriate measures must be implemented to monitor and manage the identified risks. > **Tip:** Professionals have the right to refuse a client if they are unwilling to undergo identification procedures or if there is a lack of credibility associated with the client. ### 3.4 Investigation of suspicious transactions When red flags or suspicious indicators arise during the course of a business relationship, a thorough investigation is required. This typically involves the following steps: 1. **Internal Reporting:** An internal report detailing the suspicious activity should be generated. 2. **Client Notification:** The client should be informed, in writing, about the findings of the investigation. This notification should also highlight potential penalties. 3. **Risk Reclassification:** If suspicious activity persists or is significant, the client may be reclassified as a high-risk client. 4. **Mandatory Reporting:** Professionals are obligated to report any suspicion of ML/FT, along with the underlying facts, to the Financial Intelligence Unit (CFI). ### 3.5 Documentation and record-keeping Meticulous documentation and record-keeping are paramount. The following types of documents must be retained: * General risk assessment reports. * Client identification data. * Evidence supporting transactions. These records must be kept for a period of 10 years, commencing from the end of the business relationship or the date of the occasional transaction. ### 3.6 Ultimate beneficial owner (UBO) registry The UBO registry is a central register containing information about the ultimate beneficiaries of companies, non-profit organizations, foundations, trusts, and other legal entities that are comparable to trusts. The primary objective of the UBO registry is to identify who truly stands behind a legal structure or who derives economic benefit from it. #### 3.6.1 Definition of ultimate beneficial owner An "ultimate beneficial owner" is defined as the natural person or persons who ultimately own or control the client, the client's proxy, or the beneficiary of life insurance contracts. It also includes the natural person or persons for whom a transaction is conducted or a business relationship is established. Crucially, a UBO is always a natural person. #### 3.6.2 UBO categories for companies For companies, UBOs are categorized into three groups: 1. **Ownership and Voting Rights:** Natural persons who directly or indirectly hold more than 25% of the voting rights or capital ownership in the company. 2. **Control via Other Means:** One or more natural persons who exercise control through other means, such as the right to appoint or dismiss directors. 3. **Senior Management:** If the above categories cannot be identified, the ultimate beneficiaries are considered to be the senior management personnel. #### 3.6.3 Information to be reported for UBOs The following information must be provided for each UBO: * Full name. * Date of birth. * Nationality or nationalities. * Full residential address. * The date on which the person became a UBO. * Identification number from the national registry (or equivalent). * The category of UBO (as defined above). * For UBOs of companies, the weighted percentage of shares or voting rights in the reporting entity. #### 3.6.4 Direct and indirect UBOs * **Direct UBO:** A natural person who is directly the owner or exercises control over the reporting entity. * **Indirect UBO:** A natural person who owns or controls the reporting entity through one or more intermediary legal entities. Identifying indirect UBOs involves assessing ownership or control of intermediary entities. This is typically determined if: 1. The weighted value of the participation in shares/voting rights via intermediary companies exceeds 25% in the reporting entity. 2. Ownership/control in an intermediary company (holding more than 50%) that, in turn, has more than a 25% interest or control in the reporting entity. --- # Record-keeping and cash payment restrictions This section details the mandatory record-keeping requirements for AML-related documents, including a ten-year retention period, and outlines the restrictions on cash payments, specifying thresholds and prohibited transactions. ## 4. Record-keeping and cash payment restrictions ### 4.1 Document retention All documents relevant to Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) regulations must be retained for a period of 10 years. This retention period begins from the end of the business relationship with a client or from the date of an occasional transaction. > **Tip:** Ensure a systematic approach to document storage and retrieval to comply with the 10-year retention requirement. This includes maintaining records of client identification, risk assessments, and transaction evidence. ### 4.2 Restrictions on cash payments The law imposes significant restrictions on the use of cash to prevent money laundering and terrorist financing. #### 4.2.1 Prohibited cash transactions * **Real estate purchases:** Cash payments are explicitly prohibited for the purchase of real estate. * **Payments and gifts exceeding a threshold:** Payments or gifts exceeding 3,000 euros are forbidden. #### 4.2.2 Exceptions to cash payment restrictions The restrictions on cash payments do not apply to: * Transactions between private individuals. * Transactions conducted with banks. #### 4.2.3 Reporting suspicious cash transactions When cash transactions are suspected of being linked to money laundering or terrorist financing, they must be reported to the relevant authority. > **Example:** If a professional receives a cash payment for a service that exceeds 3,000 euros and is not a transaction between private individuals or with a bank, this would be a prohibited transaction and, if suspected of being linked to illicit activities, must be reported. ### 4.3 Ultimate Beneficial Owner (UBO) Register The UBO register is a central registry containing information about the ultimate beneficial owners of companies, associations, foundations, trusts, and other similar legal entities. Its purpose is to identify the natural persons who ultimately own or control these legal structures or economically benefit from them. #### 4.3.1 Definition of ultimate beneficial owner An ultimate beneficial owner (UBO) is defined as the natural person(s) who ultimately own or control the client, the client's agent, or the beneficiary of life insurance contracts, and/or the natural person(s) on whose behalf a transaction is executed or a business relationship is established. A UBO is always a natural person. #### 4.3.2 UBO identification categories for companies For companies, UBOs are categorized into three groups: 1. **Direct ownership or voting rights:** Natural persons who directly or indirectly hold more than 25% of the voting rights or ownership interest in the company's capital. 2. **Control through other means:** One or more natural persons who exercise control through other means, such as the right to appoint or dismiss directors. 3. **Senior management:** If the above categories cannot be identified, the ultimate beneficial owners are considered to be the senior management personnel. #### 4.3.3 Information to be disclosed for UBOs The following information must be reported for each UBO: * Full name * Date of birth * Nationality(ies) * Full residential address * Date on which the person became a UBO * Identification number (e.g., National Register number or equivalent) * Category of UBO * For UBOs of companies: the (weighted) percentage of shares or voting rights in the reporting entity. #### 4.3.4 Direct vs. Indirect UBOs * **Direct UBO:** A natural person who is directly the owner or exercises control over the reporting entity. * **Indirect UBO:** A natural person who owns or controls the reporting entity through one or more intermediary legal entities. #### 4.3.5 Identifying indirect UBOs Indirect UBOs are identified through a chain of ownership or control: 1. If the weighted value of the participation in shares/voting rights through intermediary companies exceeds 25% in the reporting entity. 2. If there is ownership or control in an intermediary company (over 50%) that, in turn, holds a significant interest or control (over 25%) in the reporting entity. --- # Ultimate beneficial owner (UBO) registration This section details the purpose, scope, and required information for the Ultimate Beneficial Owner (UBO) registration process. ### 5.1 Purpose and definition of UBO The UBO register is a central registry containing information about the ultimate beneficial owners of companies, international non-profit organizations (vzw's), foundations, trusts, and other legal entities comparable to trusts. Its primary goal is to identify the natural persons who ultimately own or control a legal entity, or who economically benefit from it. The definition of an "ultimate beneficial owner" (UBO) refers to the natural person(s) who are the ultimate owner(s) of or exercise control over the client, the client's representative, or the beneficiary of life insurance agreements. It also includes the natural person(s) for whom a transaction is carried out or a business relationship is established. Crucially, a UBO is always a natural person. ### 5.2 Categories of UBOs in companies For companies, UBOs are categorized into three groups: 1. **Ownership or voting rights:** Natural persons who directly or indirectly hold more than 25% of the voting rights or ownership interest in the capital of the company. 2. **Control through other means:** One or more natural persons who exercise control over the company through other means, such as having the right to appoint or dismiss management. 3. **Senior management:** If the UBOs cannot be identified through the first two categories, then the senior management of the company are considered the ultimate beneficial owners. ### 5.3 Information to be reported for UBOs The following information must be reported for each UBO: * Full name * Date of birth * Nationality/Nationalities * Full residential address * Date on which the person became a UBO * Identification number (e.g., national register number or equivalent) * Category of UBO (as defined above) For UBOs of companies, additional details are required: * The (weighted) percentage of shares or voting rights held in the reporting entity. ### 5.4 Direct and indirect UBOs The distinction between direct and indirect UBOs is important: * **Direct UBO:** A natural person who is directly the owner of or exercises control over the reporting entity. * **Indirect UBO:** A natural person who owns or controls the reporting entity through one or more intermediary legal entities. The identification of indirect UBOs typically involves two steps: 1. Assessing if the weighted value of the participation in shares or voting rights through intermediary companies in the reporting entity exceeds 25%. 2. Examining ownership or control in an intermediary company (where the person holds more than 50%) that, in turn, holds a significant interest (more than 25%) or control in the reporting entity. > **Tip:** Understanding the difference between direct and indirect ownership is crucial for accurately identifying all UBOs within complex corporate structures. > **Example:** If Person A directly owns 30% of Company X, Person A is a direct UBO of Company X. If Person A owns 60% of Company Y, and Company Y owns 30% of Company X, Person A is an indirect UBO of Company X. --- ## Common mistakes to avoid - Review all topics thoroughly before exams - Pay attention to formulas and key definitions - Practice with examples provided in each section - Don't memorize without understanding the underlying concepts

| Term | Definition | |------|------------| | Money laundering | The process of disguising the origin of illegally obtained money by passing it through a complex series of transactions, making it appear as legitimate income. This includes converting or transferring funds known to be derived from criminal activity to conceal their illegal source or to aid those involved in avoiding the legal consequences of their actions. | | Financing of terrorism | The provision or collection of funds and other assets, by whatever means, directly or indirectly, with the intention that they shall be used, or in the knowledge that they will be used, wholly or partly, by a terrorist organization or by a terrorist acting alone, even without any connection to a specific terrorist act. | | Ultimate beneficial owner (UBO) | The natural person or persons who ultimately own or control the client, the client's proxy, or the beneficiary of life insurance contracts, and/or the natural person or persons for whom a transaction is performed or a business relationship is established. The UBO is always a natural person. | | AMLCO (Anti-money laundering compliance officer) | The designated responsible individual within a professional firm tasked with overseeing internal control measures, preparing reports on atypical transactions, potentially reporting suspicious activities to the Financial Intelligence Unit (FIU), and ensuring staff training on AML procedures. | | Risk assessment | The process undertaken by a professional for each client to identify and categorize potential risks associated with money laundering and terrorist financing. These categories typically include low, moderate, and high risk levels, informing subsequent vigilance measures. | | Client acceptance policy | A set of guidelines and procedures established by a professional firm to assess potential clients before establishing a business relationship. This policy aims to identify and mitigate risks related to money laundering and terrorist financing by evaluating the client's profile, the purpose of the relationship, and the services offered. | | Suspicious transaction | Any transaction that raises red flags or triggers suspicion of money laundering or terrorist financing activities. Professionals are obligated to investigate such transactions, internally report them, inform the client, and, if suspicions persist, report them to the Financial Intelligence Unit (FIU). | | Document retention | The mandatory requirement to store specific documents related to anti-money laundering activities, including general risk assessments, identification details, and proof of transactions, for a period of 10 years from the end of the business relationship or the date of an occasional transaction. | | Cash payment restrictions | Regulations that limit or prohibit the use of cash for certain transactions, such as the purchase of real estate, or set a maximum threshold (e.g., €3000) for cash payments or gifts between parties, with exceptions for transactions between private individuals or with banks. | | UBO register | A central registry containing information about the ultimate beneficial owners of companies, non-profit organizations, foundations, trusts, and other legally comparable entities. Its purpose is to identify the individuals who truly stand behind a legal structure or financially benefit from it. |