Anti Money Laundering Policy

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Anti-Money Laundering (AML) Policy for Whitesky Sourcing Ltd

Effective Date: 10/09 /2024


Last Review Date: 10/09/2024


Responsible Officer: Teena Choudhury- Director

1.Introduction

This Anti-Money Laundering (AML) policy outlines the procedures and responsibilities that Whitesky Sourcing Ltd follows to prevent money laundering and ensure compliance with UK legislation. Money laundering poses a significant risk to the integrity of the financial system, and as a property estate agency, we are committed to upholding the highest standards of AML compliance.

2. Objectives

• To ensure compliance with the Money Laundering Regulations 2017 and other relevant legislation.

• To prevent the company from being used, intentionally or unintentionally, by criminal elements for money laundering.

• To ensure that all employees understand their responsibilities in combating money laundering and are trained to recognise and report suspicious activities.

3. Roles and Responsibilities

• Teena Choudhury, Founder: As the designated AML Compliance Officer (MLRO), Teena Choudhury is responsible for overseeing the implementation of this policy, including customer due diligence (CDD), monitoring transactions, stress testing of funds, and reporting suspicious activities.

• All Employees: Every employee of Whitesky Sourcing Ltd is responsible for adhering to this policy and reporting any suspicious activities to the AML Compliance Officer.

4. Customer Due Diligence (CDD)

4.1 Identifying and Verifying Customers 
Whitesky Sourcing Ltd implements rigorous customer due diligence procedures to verify the identity of all clients, whether they are buyers, sellers, or intermediaries.

• Individual Clients: Obtain and verify identification documents such as passports, driving licences, and utility bills.

• Corporate Clients: Verify the identity of the company through Companies House records, and identify the ultimate beneficial owners (UBOs).

• High-Risk Clients: For clients deemed high-risk (e.g., politically exposed persons (PEPs), clients from high-risk jurisdictions, or those with complex financial arrangements), enhanced due diligence (EDD) measures will be applied.

4.2 Stress Testing of Funds
As part of our enhanced due diligence process, we conduct thorough stress testing of client funds and bank statements to verify the legitimacy and source of funds.

• Source Verification: We require clients to provide detailed bank statements covering at least the last six months. These statements must clearly indicate the origin of funds, including transfers and deposits.

• Stress Testing: We scrutinise bank statements for inconsistencies, unusual patterns, or large cash transactions that could indicate potential money laundering. This includes checking for:

  • Sudden influxes of large sums.

  • Transfers between multiple accounts without clear justification.

  • Unexplained or round-number deposits.

  • Transactions with known high-risk jurisdictions.

• Fund Stability Check: We assess whether the funds are stable and consistent with the client’s declared financial profile. If there are discrepancies, clients must provide satisfactory explanations and additional documentation.

4.3 Ongoing Monitoring
All clients will be monitored on an ongoing basis. Any changes in their circumstances, such as unusual transactions, new sources of funds, or inconsistencies in financial documents, will trigger a review of their risk assessment and, if necessary, further due diligence and stress testing.

4.4 Prohibition on Working with Banned Countries
Whitesky Sourcing Ltd will not engage in business with individuals, entities, or transactions originating from or associated with countries that are on the UK’s sanctions list. All clients will be screened against current sanctions lists, and any client or transaction linked to a banned country will be immediately rejected.

5.Risk Assessment

5.1 Business-Wide Risk Assessment
Whitesky Sourcing Ltd conducts a regular risk assessment to evaluate the risks of money laundering across all its operations. This includes the types of clients we deal with, the geographical areas of operation, and the nature of the property transactions.

5.2 Client-Specific Risk Assessment
Each client is assessed individually based on their risk profile. Factors such as the client’s location, type of transaction, and method of payment are considered in determining whether the client poses a low, medium, or high risk of money laundering.

5.3 Enhanced Due Diligence for High-Risk Clients
For clients identified as high-risk, enhanced due diligence procedures are applied. This includes a deeper investigation into the client’s financial background, additional verification of identity, and more rigorous stress testing of funds and financial documents.

5.4 Politically Exposed Persons (PEPs) and Sanctions Checks
All clients will be screened to determine if they are Politically Exposed Persons (PEPs) or are subject to sanctions.

• PEPs: Individuals who are or have been entrusted with prominent public functions, along with their family members and close associates, are considered PEPs. Clients identified as PEPs will be subject to enhanced due diligence and continuous monitoring.

• Sanctions Lists: We will regularly check clients against the UK’s list of sanctioned individuals and entities, as well as against sanctioned countries. Any client found to be on a sanctions list or associated with a sanctioned country will be rejected.

6. Training and Awareness

6.1 Employee Training
All employees are required to undergo AML training at least annually. Training will cover how to identify suspicious activities, conduct customer due diligence, perform stress testing of funds, and the legal requirements for reporting suspicious activities.

6.2 Continuous Education
The company is committed to providing ongoing education to ensure that all employees remain informed about the latest developments in AML regulations, stress testing techniques, sanctions lists, and best practices.

7. Reporting Suspicious Activities

7.1 Suspicious Activity Reports (SARs)
Employees are required to report any suspicions of money laundering to the AML Compliance Officer immediately. The AML Compliance Officer will then assess the situation and, if necessary, file a Suspicious Activity Report (SAR) with the National Crime Agency (NCA).

7.2 Tipping Off
It is a criminal offence to inform a client that a SAR has been filed against them. All employees must ensure that they do not disclose this information to the client.

8. Record Keeping

Whitesky Sourcing Ltd will maintain comprehensive records of all customer due diligence checks, stress tests, risk assessments, PEP and sanctions checks, and SARs for a minimum of five years. These records will be kept securely and made available to regulatory authorities upon request.

9. Monitoring and Review

9.1 Internal Audits
Regular internal audits will be conducted to ensure compliance with this policy, to review the effectiveness of stress testing procedures, and to identify any areas for improvement.

9.2 Policy Review
This policy will be reviewed annually, or sooner if there are significant changes to the business or regulatory environment.

10. Appendix: AML Process Flowchart

The flowchart below outlines the step-by-step process for AML compliance at Whitesky Sourcing Ltd:

1. Client Onboarding

   • Collect initial identification documents.

   • Conduct client risk assessment.

2. Customer Due Diligence (CDD)

   • Verify identity through reliable, independent source documents.

   • For high-risk clients, perform enhanced due diligence, including stress testing of funds.

   • Check clients against PEP and sanctions lists.

3. Stress Testing of Funds

   • Analyse bank statements and other financial documents.

   • Check for inconsistencies, unusual patterns, and sources of funds.

   • Require additional documentation if discrepancies are found.

4. Ongoing Monitoring

   • Regularly monitor client activity.

   • Reassess risk if there are significant changes, including further stress testing.

   • Continually screen clients against updated sanctions lists.

5. Reporting Suspicious Activity

   • Report any suspicious activities to the AML Compliance Officer.

   • File a SAR with the NCA if necessary.

6. Record Keeping

   • Securely store all documents for a minimum of five years.

   • Ensure records are accessible for regulatory review.

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By following this policy, Whitesky Sourcing Ltd aims to mitigate the risks associated with money laundering, ensuring that all funds processed through our business are legitimate and compliant with UK regulations. All staff members must familiarise themselves with this policy and adhere to its guidelines.

Internal Risk Assessment

1. Internal Checklist and Workflow for Risk Assessment

To ensure that Whitesky Sourcing Ltd adheres to the highest standards of anti-money laundering compliance, we have established a comprehensive risk assessment process that covers both the overall business operations and individual client interactions. This internal checklist and workflow guide will assist in assessing and mitigating the risks associated with money laundering.

1.1 Business-Wide Risk Assessment

The business-wide risk assessment evaluates the overall risks that Whitesky Sourcing Ltd faces within the property sourcing sector. This includes the types of clients we work with, the sourcing strategies employed, and the nature of the transactions. Key considerations include:

• Client Types: Are we dealing with individual investors, corporate entities, or high-net-worth individuals?

• Sourcing Strategies: What strategies are involved—buy-to-let, property flips, HMOs, etc.?

• Funding Sources: Are clients using UK bank accounts or foreign accounts? Is the funding source transparent and verifiable?

Checklist:

1. Client Base Analysis: Review the diversity and origin of the clients.

2. Transaction Types: Identify high-risk transaction types, such as all-cash deals or complex funding structures.

3. Geographical Risks: Consider the risks associated with the regions where the properties are located and where the clients are based.

4. Monitoring and Review: Ensure that the business risk assessment is reviewed annually and whenever there are significant changes in business operations.

1.2 Client-Specific Risk Assessment

Each client is assessed individually to determine their level of risk. This assessment is crucial in identifying clients who may pose a higher risk of being involved in money laundering activities. Key factors include:

• Country of Residence: Is the client residing in or from a high-risk jurisdiction?

• Banking Details: Does the client have a UK bank account? Are there any discrepancies in the banking information provided?

• Face-to-Face Interaction: Have we met the client in person, or is the interaction entirely remote?

• Source of Funds: Can the client provide a clear audit trail for the funds being used in the transaction?

Checklist:

1. Client Identification: Collect and verify the client’s identification documents (passport, driving licence, utility bill).

2. Residency and Nationality Check: Verify the client’s country of residence and nationality against the UK sanctions list.

3. Banking Information Verification: Ensure that the client’s bank account details are from a reputable financial institution and are consistent with the client’s profile.

4. Face-to-Face Meeting: Whenever possible, arrange a face-to-face meeting to verify the client’s identity and discuss their investment plans.

5. Source of Funds Documentation: Request and review detailed bank statements, investment records, and other documents to confirm the legitimacy of the funds.

1.3 Risk Categorisation: Low vs High Risk

Clients will be categorised as either low or high risk based on the information gathered during the client-specific risk assessment.

• Low-Risk Clients: Typically UK residents with UK bank accounts, transparent sources of funds, and straightforward investment strategies.

• High-Risk Clients: Clients from high-risk jurisdictions, those with complex financial arrangements, or those who are PEPs (Politically Exposed Persons).

Checklist:

1. Risk Categorisation: Classify each client as low or high risk based on their profile.

2. Enhanced Due Diligence (EDD): For high-risk clients, apply enhanced due diligence measures, including additional verification steps and ongoing monitoring.

3. Simplified Due Diligence (SDD): If the client is classified as low risk, document the rationale for applying simplified due diligence.

1.4 Monitoring and Ongoing Compliance

Risk assessment is not a one-time activity but an ongoing process. Continuous monitoring is essential to identify any changes in the client’s circumstances or behaviour that could indicate increased risk.

Checklist:

1. Regular Monitoring: Review client transactions regularly to detect any unusual or suspicious activity.

2. Ongoing Risk Assessment: Reassess the client’s risk profile periodically, especially if there are changes in the client’s investment behaviour or funding sources.

3. Documentation and Record-Keeping: Maintain detailed records of all risk assessments, due diligence checks, and monitoring activities for at least five years.

1.5 Politically Exposed Persons (PEPs) and Sanctions Checks

It is vital to screen all clients against the UK’s PEP and sanctions lists to ensure compliance with AML regulations.

Checklist:

1. PEP Screening: Use reliable databases to check if the client is a PEP or related to a PEP.

2. Sanctions List Screening: Ensure the client is not on any sanctions list or from a country that is on the sanctions list.

3. Documentation: Record the results of the PEP and sanctions checks in the client’s file.

2. Client Due Diligence and Identity Verification Workflow

The following workflow provides a step-by-step process for conducting client due diligence (CDD) and verifying client identity at Whitesky Sourcing Ltd:

1. Initial Client Contact:

   • Gather basic client information.

   • Schedule a face-to-face meeting if possible.

2. Document Collection:

   • Request identification documents (passport, driving licence, utility bill).

   • Obtain proof of address and bank account details.

3. Identity Verification:

   • Verify the authenticity of the provided documents.

   • Use electronic verification systems if necessary.

   • If identity cannot be verified, do not proceed with the client.

4. Source of Funds Verification:

   • Request bank statements, investment records, and other relevant documents.

   • Analyse the documents for consistency and legitimacy.

   • Conduct stress testing on the financial data to ensure funds are clean.

5. Risk Assessment:

   • Categorise the client as low or high risk based on the information collected.

   • Apply enhanced due diligence if the client is high risk.

6. PEP and Sanctions Screening:

   • Screen the client against PEP and sanctions lists.

   • Document the screening results.

7. Ongoing Monitoring:

   • Set up a schedule for regular monitoring of the client’s transactions and behaviour.

   • Update the client’s risk assessment if there are any significant changes.

8. Record-Keeping:

   • Store all documents and records securely.

   • Ensure all records are kept for at least five years.

3. Conclusion

By following this comprehensive internal checklist and workflow, Whitesky Sourcing Ltd ensures that all potential risks related to money laundering are thoroughly assessed and mitigated. This approach helps maintain compliance with UK regulations and protects the integrity of our business operations.