Money Laundering

M

Marion

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This was originally posted by Jack the Lad: I removed it in error: [edited by Marion]



Recently I sold my car and lodged the draft into my NIB account, next day I get a call from the bank asking the nature of the funds ie where did the money come from. Guy told me it was standard procedure for money laundering regulations to ask the source of lodgments over a certain amount.

Does this sound strange, I mean does the bank phone everyone who deposits larger than normal sums into their accounts. I don't get it...
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yep - the banks have to ask the source of money over a certain amount (think it is anything over 10k???) as a result of money laundering laws.
 
I had this as well. I just lied.

It's my money, and my business how I got it.
 
Seems strange that they would accept a verbal response for something so important as this.
 
I would have thought that the bank clerk should have asked the question when you actually lodged the draft (but you probably used some sort of 'Quicklodge' facility, right?).

Banks have a legal obligation to establish the source of funds where the transaction is in excess of a certain amount, and is in a form other than a direct debit, a bank draft where the underlying source of funds is from a bank account, or a personal cheque drawn on the account of a customer of the same bank, or another bank within the State (or certain other European countries I think).

If they think that the transaction is suspicious, staff have an obligation to file a 'Suspicious Transactions Report' and escalate this internally. If it is indeed deemed to be suspicious by the bank's compliance team, it will go to the Money Laundering Reporting Officer, who may see fit to contact the Revenue and/or Gardai, if they believe the money is not from a legitimate source, or has not been declared to the Revenue.

It's your money, you may be perfectly entitled to it, but you have an obligation to the State to account for it's source if you are asked to do so. The bank staff are only following procedure in asking you for the source of funds, someone on the front desk isn't particulalry interested in your business (they are used to handling huge sums of cash, it gets boring after a while), and are probably a little embarrassed in having to ask the question.
 
was talking to someone who tried opening a bank account with NIB and they wanted all kinds of information about source of income etc. I suppose this is OK under money laundering but the person was sensitive as he didnt want the bank to know his income. He went to the BOI and opened the account no problem! is it a case of the NIB interpreting the rules to rigidly?
also does anyone think the government are passing the buck on to various institutions i.e. banks etc by getting them to report under money laundering? more red tape for the banks and extra tax income for the state?
 
If he was opening an account with a draft or cash, they would have to establish the source of funds for ML purposes.


It is quite likely that NIB wanted to establish his salary/income for marketing research purposes, i.e. so they could target him with specific products etc. If he doesn't want to reveal that information, he is perfectly entitled to keep it to himself. Key point: if you feel uncomfortable reavealing any information on an application form, ask the person who is requesting it why they need it, and if they don't give you an explanation that is agreeable, tell them that you rather wouldn't disclose that information and see what they say.

Of course the government is passing the buck to the banks, in the same way it does to retailers (VAT), employers (income tax), but is there a more efficient way to collect tax? They are not collecting 'extra' tax income, merely what is legally payable.
 
What concerns me about the money laundering process is this.

Several thousand STR Reports (over 5000)
and a handful of proesecutions.

1. Is there over reporting?
2. How does CBFSRA justify 'no computerisation necessary'?
3. Why is there not civil liberty types highlighting the grave over reporting (ass covering ..if in doubt report the whole lot) versus the obvious technique of 'skimming' because of 2 above.
 
Does that mean if someone buys an expensive car, painting, jewellery etc, the retailer will ask the source of the cash?

Even if an item is paid for by cheque, how does that prove tax has been paid? Is there any limit to the number of different bank accounts an individual can have? I'm just curious.

Correct me if I'm wrong but I don't think the Prize Bond people ask that question when large investments are made.
 
sherib said:
Correct me if I'm wrong but I don't think the Prize Bond people ask that question when large investments are made.
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Actually they do. See here:
12 In accordance with the anti-money laundering
provisions of the Criminal Justice Act, 1994,
purchasers must provide their date of birth and
may be required to provide proof of (1) name and
(2) address. In accordance with the provisions of
the Finance Act, 2004 relating to interest paid to
non-residents, purchasers who do not already hold
Prize Bonds will be asked to provide proof of (1)
name, (2) address, (3) country of residence and (4)
tax reference number (or place and date of birth if
proof of a tax reference number is not available) in
the event of winning a prize.
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sherib said:
Does that mean if someone buys an expensive car, painting, jewellery etc, the retailer will ask the source of the cash?
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I don't think that retailers are obliged (by law) to ask the question.

sherib said:
Even if an item is paid for by cheque, how does that prove tax has been paid? Is there any limit to the number of different bank accounts an individual can have? I'm just curious.
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There is a presumption that if a cheque is drawn on an Irish bank account that the funds have been 'vetted' by that bank. But this would only apply to lump sum payments, i.e. a series of smaller transactions wouldn't necessarily attract any monitoring by the bank (there are procedures where a series of transactions approach xxxxx over a number of months). But you have a point-paying by cheque doesn't necessarily prove that tax has been paid, but it is easier to trace the source of funds when a cheque is used.
 
CCOVICH said:
I don't think that retailers are obliged (by law) to ask the question.
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According to only certain professions are obliged to comply with the relevant money laundering legislation and, for example, ask questions about the original and use of large sums:
From 15th September 2003, other designated professions will be required to use the same measures as financial institutions to combat money laundering. These professions include:

  • accountants
  • auctioneers
  • auditors
  • estate agents
  • tax advisors
  • solicitors
  • investment business firms
  • agencies that provide money remittance services (i.e., those that 'wire' money from one place to another)
  • dealers in high value goods (i.e., precious stones, metals, works of art where payment is made in cash for a sum of 15,000 euro or more)
  • casinos*
  • administration companies providing services to collective investment schemes
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ClubMan said:
According to only certain professions are obliged to comply with the relevant money laundering legislation and, for example, ask questions about the original and use of large sums:
[/list]
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Clubman,

What does the star after Casino refer to ?
 
does anyone know what the limit is that the banks are oblidged to ask the source of the fund? İ couldn't find anythıng solıd onlıne. TİA
 
johnball said:
does anyone know what the limit is that the banks are oblidged to ask the source of the fund? İ couldn't find anythıng solıd onlıne. TİA
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There are no limits. A single large amount, regular small amounts, a reported association with a person of interest - a politician for instance, a court report and so on. The requirement is not just money, it is a requirement to know your customer. There are companies that sell software to scan transactions and behaviour, identify similar names, misspelled names, use of Irish names, news clipping services, court reports etc... (I used to work for one of them in a past life).
 
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