Code of Practice
Chapter 10: Anti Money Laundering
Notaries must be familiar with and comply with all anti-money-laundering and anti-terrorism legislation as it applies to notaries. The application of this legislation to notaries is explained and illustrated in an Official AML Guidance document approved by the Treasury. The Official AML Guidance is provided in hard copy to all newly qualified notaries by the Faculty Office and is freely available to download from the website of the Faculty Office.
Notaries are required to be familiar with the Official AML Guidance and to follow it when providing notarial services [Prevention of Money Laundering Regulation 3(2)]. Failure to be familiar with the Official AML Guidance and/or failure to follow it when providing notarial services is Notarial Misconduct [Prevention of Money Laundering Regulation 3(3)].
In addition to the requirement imposed on notaries by the Master of the Faculties to be familiar with and to follow the Official AML Guidance, following the Official AML Guidance is also of key importance for deciding whether or not a notary has committed an offence under the anti-money-laundering and anti-terrorism legislation, or has complied with the Money Laundering Regulations [Section 21A(6) of the Terrorism Act, Section 330(8) of the Proceeds of Crime Act, Regulation 42(3) and Regulation 45(2) of the Money Laundering Regulations]. Following the Official AML Guidance is a defence against a charge of failing to make a disclosure or to apply due diligence measures.
The Official AML Guidance provides that it is an offence for a notary not to make a disclosure if there are reasonable grounds for knowledge or suspicion of terrorist activity or money laundering whilst providing notarial services.
The authentication work undertaken by a notary as a public certifying officer is distinguished from any work undertaken by a notary which involves playing a “substantive role” in the transaction. Where a notary plays a substantive role in a transaction this is called Relevant Business in the Official AML Guidance.
A notary should therefore have carefully considered procedures to distinguish between ordinary authentication work and Relevant Business. There may be situations in which the distinction between authentication work and Relevant Business is difficult to draw.
In the course of providing notarial services, a notary may be asked to provide assistance that goes beyond the notary’s strict authentication function. For example, a notary will often advise clients on the appropriate manner of executing a deed under the law of England and Wales, and may also assist with the preparation of additional documents such as minutes of a meeting of the board of directors of a company. In these circumstances, a notary should pay particularly close attention to the Official AML Guidance and consider whether or not the service provided is Relevant Business.
- Notaries act as effective gatekeepers in international efforts to prevent terrorism and money laundering.
- Notaries and their staff have sufficient training to implement anti-money-laundering and anti-terrorism legislation when providing notarial services.
- Suspicious Activity Reports submitted by notaries are of high quality.
- The reputation of the notarial profession is safeguarded from the dangers of notaries lending an appearance of legitimacy to a fraudulent transaction.
- You monitor incoming instructions and consider whether or not any given instruction is Relevant Business.
- You take a risk-based approach by managing your notarial practice with regard to the risks of your services being used for money laundering or terrorist financing.
- You report suspicions of money laundering or terrorist funding promptly to the National Crime Agency or, if appropriate, your notarial Money Laundering Reporting Officer.
- You update yourself regularly on developments in anti-money-laundering and anti-terrorism legislation and revisions to the Official AML Guidance.
- You are able to demonstrate from your records that the extent of any customer due diligence measures that you have taken is appropriate taking into account the risks of money laundering and terrorist financing.
- You comply with any asset-freezing financial sanctions and financial restrictions imposed on under United Nations resolutions, EU Regulations, or domestic legislation.
- You monitor the effectiveness of the controls that you put in place to manage the risks of your practice being used for money laundering or terrorist financing.
- You ensure that ongoing training is provided to your staff in anti-money-laundering and anti-terrorism measures.
- You facilitate a transaction that results in money laundering or the funding of terrorism.
- You act in a matter that involves a breach of sanctions.
- You fail to adequate proper customer due diligence on a client when dealing with Relevant Business.
- You tip off a client whom you suspect of money laundering.
- You fail to monitor your client relationships on an ongoing basis, which results in your practice being used for money laundering or terrorist financing after initial checks on the clients revealed no cause for concern.