UnfairworkAustralia.com.au is dedicated to fighting for the entitlements of contractors.
These entitlements include annual and long service leave and employer superannuation contributions.
The recent Federal Court decision in the case of Moffet v Dental Corporation Pty Ltd held that notwithstanding the classification of Dr Moffet as being an independent contractor that he was entitled to employer superannuation contributions as he was engaged under a contract for the supply of labour.
Contact UnfairworkAustralia.com.au for assistance.
Anti money laundering policies in the United Kingdom
The UK and NZ Governments have introduced money laundering regulations which apply to business sectors including those of accountants, real estate agents and solicitors.
These regulations have not yet been introduced in Australia. However, the Federal Opposition treasurer has recently announced intentions to enact this legislation.
Pertinant anti money laundering policies
Those businesses to which the regulations apply are required to implement controls including the following:
Assess the risk of the business being used by criminals to launder money.
Verifying the identity of beneficial owners of companies and partnerships.
Monitoring customers business activities and reporting suspicions.
Appoint a nominated officer.
Verifying customer identification.
The implementation of controls.
Anti money laundering and the Australian property boom
It is arguable that the early implementation of such regulations in Australia may have significantly impacted the property boom.
In this respect what is referred to as politically exposed persons, including politicians, management of state owned corporations, members of armed forces (including family members) may have been restricted in their ability to acquire substantial property interests.
Polemic Forensic’s anti money laundering services include the following:
1. The diagnosis and implementation of controls and risk assessment systems.
2. The investigation of individuals and business entities in relation to sanctions.
3. The conduct of investigations into the sources of wealth.
In January 2009 a solicitor wrote to two forensic accountants seeking quotes on behalf of his client who was involved in divorce proceedings. After receiving the two quotes nothing more was heard from him because the solicitor himself had become the subject of court proceedings. He had been arrested for the social supply of drugs at a party and was subsequently convicted. Although he avoided a prison sentence and continued to operate as a solicitor he was served with a Statement of Information under the Proceeds of Crime Act 2002. The Statement calculated the solicitor’s benefit from crime at just under £800,000 over a six year period. This was the only Statement of Information issued by the Crown in the course of the confiscation proceedings. However the Crown did, from time to time, produce new calculations of the alleged benefit, each calculation being lower than the previous one. By June of 2010 the Crown accountant calculated the alleged benefit at a much lower figure of around £100,000. She stated that, in contrast to many such cases, she could find no transactions that appeared to represent proceeds of crime. Despite this, she sought “vouching” for the bank lodgements that were included in the £100,000. The defence asked the bank to provide copies of deposit slips and the cheques lodged. However most of these cheques had been returned to the originating banks and were therefore unavailable. Some deposit slips had been misfiled by the local branch. Many deposit slips that were found lacked the sort code of the issuing bank. Therefore, in practice it proved impossible to obtain all the “vouching” sought by the Crown. By December 2010 the Crown figure for alleged benefit had reduced to some £25,000. For some time the defence had believed that the Crown wished to abandon proceedings but that it needed an excuse to allow this to happen. At this point the Crown ceased to ask for “vouching” and instead asked for explanations for the remaining unexplained bank lodgements. The defence was able to provide these, and the Crown abandoned proceedings on April Fool’s Day 2011.
Ask oneself whether there is a greater risk of one’s office being destroyed by fire or flood or one’s data being seized or corrupted by criminals demanding a ransom fee to restore it. Similarly it is instructive to consider whether most professional firms would find it easier to recover from the loss of its physical premises than to recover from the loss of its computerised data.
It is perhaps no coincidence that professional indemnity underwriters are starting to enquire about the procedures their insured clients have in place to guard against cyber fraud. This increased scrutiny has to be seen in the context of an increasing number of cyber-related claims against professional firms. Despite record numbers of such claims, some predict that we are currently seeing only the tip of a very large ice-berg.
Several conveyancing firms have reportedly received fake emails that appear to come from their clients, often late on a Friday afternoon, providing bank account details into which they instruct that the proceeds from property sales are to be paid. Only after funds have been transferred has it become apparent that the clients’ email accounts had been hacked and the email instructions had, in fact, not been sent by the clients themselves but by criminals masquerading as them.
It is not only lawyers and conveyancers that have been subject to this type of fraud. In these days of outsourcing, firms of accountants too can find themselves targeted as instructions to pay suppliers are sent to them that purport to come from clients but which actually originate from hacked email accounts.
Typically the hacked emails look very convincing and are far-removed from the amateurish missives in poor English that purport to come from African royalty. Falling victim to a scam may just be a matter of bad luck but there are certainly steps that can be put in place to minimise the risk. Not only is it important to take preventative measures but, equally, if a firm faces a claim from a client arising from cyber-fraud, it will be of critical importance in the defence of the claim to be able to demonstrate that the firm had taken all reasonable steps to minimise the risk. Merely putting a disclaimer on the bottom of an email may no longer suffice.
Gambling companies and financial institutions have policies in place in relation to know your client (KYC) and suspicious transactions that their clients may seemingly engage in.
However recent media reports that allege a lawyer working at Atanaskovic Hartnell transferred millions of dollars from a client into his personal bank account and into his personal betting accounts raise questions as to whether the relevant financial institutions and betting companies actually investigated such transactions which would at the least by virtue of the quantum be classified as being unusual and suspicious.Know your client and suspicious transaction reports
AML CTF RISK ASSESSMENTS AND CONTROLS
The UK Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 were enacted on 26 June 2017.
Section 18 specifies that in identifying and assessing the risks of money laundering and terrorist financing to which its business is subject reference must be had to the following:-
(i) its customers;
(ii) the countries or geographic areas in which it operates;
(iii) its products or services;
(iv) its transactions; and
(v) its delivery channels.
In deciding what steps are appropriate, the firm/entity must take into account the size and nature of its business.
Policies and controls and procedures to mitigate and manage effectively the risks of money laundering and terrorist financing identified in any risk assessment undertaken are to include:-
(i) regularly review and update the policies, controls and procedures
(ii) maintain a record in writing of the policies, controls and procedures
(iii) any changes to those policies, controls and procedures made the steps taken to communicate those policies, controls and procedures, or any changes to them, within the relevant person’s business.
The policies, controls and procedures adopted must be—
(i) proportionate with regard to the size and nature of the relevant person’s business, and
(ii) approved by its senior management.
The policies, controls and procedures must include—
(i) risk management practices;
(ii) internal controls
(iii) customer due diligence
(iv) reliance and record keeping
(v) the monitoring and management of compliance with, and the internal communication of, such policies, controls and procedures.
Polemic Forensic will be presenting a seminar pertaining to anti money laundering risk processes on 21 November 2017 at Level 3 111 Harrington Street Sydney.
The seminar will deal with issues including client risk classification, risk monitoring and controls, risk assessment factors, Transparency International, politically exposed persons, negative information and industry risks.
The Anti Money Laundering and Countering Financing of Terrorism (AML/CTF) Act 2009 will impact upon accountants and lawyers whom conduct business in New Zealand.
The legislation is operative as from 1 October 2018.
Accounting firms will be required to appoint a compliance officer, perform risk assessments, develop an appropriate programme and report suspicious transactions.
The legislation and its impact is similar to that enacted in the United Kingdom.
Airbus, Europe’s largest aerospace multinational, appears to be facing years of investigation by French and UK authorities amid allegations of corruption over jet sales. The investigation began after Airbus drew the attention of regulators to inaccurate declarations it had made to the export credit finance agency over payments to sales agents.
According to the Guardian newspaper, evidence including hundreds of pages of leaked bank records, internal memos and financial statements reveal that two firms secretly controlled by Airbus engaged in transactions involving €19 million (£16.7 million), a large part of which was then routed to an unknown company via a tax haven. When asked, Airbus was unable to say who had received the money, nor why its control of the two companies had been concealed.
In 2007, Eolia, a Maltese company that retrofits passenger jets to transport cargo, bought 26 per cent of Avinco Holdings, a Dutch company that sells second-hand aircraft and helicopters. Both firms presented themselves as independent entities without any significant external support from other firms but in reality they were secretly controlled by Airbus.
Meanwhile, Avinco Holdings is mainly financed by a UAE businessman who held 14,999 shares through a holding company. Airbus owned only one share through a shell company in the tax haven of Curacao. However, according to a secret agreement, Airbus had the right to seize control of Avinco Holdings at any time. In exchange, the UAE businessman received an annual dividend equivalent to 20 per cent of his total investment.
It will certainly be a lengthy investigation as records going back over many years will need to be combed through and the organisations involved are distributed across the globe. However, once the forensic accountants start sifting through the evidence, a picture will begin to emerge.
… So says a top forensic investigator who has alleged that the UK is at the centre of $3 billion (£2.27 billion) worth of laundered Azerbaijani money.
The so-called ‘Azerbaijani Laundromat’ was uncovered in a joint investigation by 17 European media organisations, including the Guardian and Le Monde and was published by the Organised Crime and Corruption Reporting Project (OCCRP).
The Guardian claims that the ‘Laundromat’, which ran between 2012 and 2014, was a scheme to curry influence, pay lobbyists and European politicians and to launder cash.
During that time, $3 million (£2.27 million) was channelled out of Azerbaijan every day and transferred into four, offshore-managed UK companies to be ‘cleaned’ and then spent in various countries, including Germany, the UK, France, Turkey, Iran and Kazakhstan.
According to the investigation, banking records of transactions via the four UK-registered shell companies showed that “members of the country’s ruling elite were using a secret slush fund” to make the payments and purchases, as well as “launder money, and otherwise benefit themselves.”
The forensic investigator, who conducts investigations on a global scale, said these company structures were “purposefully opaque”, with foreign criminals using two Scottish limited partnerships (SLPs) to muddy the waters.
He said that this is because no one suspects Scotland, which has never been on the Financial Action Taskforce (FATF) list of non-compliant countries. SLPs have all the advantages of a regular firm, as they have a “legal personality” and can open bank accounts.
However, they are also entirely non-transparent. If they do their business abroad, they don’t have to file records or pay UK tax and no names of ‘real people’ appear on the Companies House record.
As in many such cases, the first news came to light via an anonymous source, who leaked the information to a Danish newspaper, which shared it with the OCCRP. Once the forensic investigation began, it was then only a matter of time before the whole picture began to emerge.
In this case the work of forensic investigators, including specialist forensic accountants, played a vital role in its success. The skills of experts such as these are often called upon by law enforcement agencies and prosecutors in order to prepare the evidence necessary to bring successful convictions.