One of the main risks we face for anti-money laundering purposes is that the person we deal with may not be the person they claim to be, or more likely they are people who in reality we would prefer not to do business with, are a front for another, or we are not allowed to because of HM Treasury sanctions.
In the Financial Action Task Force's third mutual evaluation report of the UK's anti-money laundering systems they point out "that information on the companies register is not verified and is not necessarily reliable".
This was highlighted recently by Worldcheck, which compared the directors' database at Companies House against global sanctions lists and found 4,000 company directors who are listed as global terror suspects or fraudsters, with a firm in Buckinghamshire being run by Croation war crimes suspect Ivan Cermak.
250,000 companies in the UK have nominee directors running their companies. The ML Regulations 2007 specifically require all firms to have systems in place to prevent transactions where anonymity is present.
To aid us in this problem new requirements under Companies Act 2006 take effect in April requiring all companies to have at least one director who is a real person, helping break down this potential badge of fraud.
Steve O'Neill is managing director of the Business Tax Centre. For more information see www.btc-nw.co.uk/
