Anti-Money Laundering Policy

Introduction

1. Northeastern University London (the University) is committed to ethical standards of business conduct and adopts a zero-tolerance approach to financial misconduct, including money laundering. The University will uphold legislation for countering money laundering, including, The Proceeds of Crime Act 2002 (as amended by the Crime and Courts Act 2013 and the Serious Crime Act 2015), the Terrorism Act 2000 (as amended by the Anti-Terrorism, Crime and Security Act 2001), Counter-Terrorism Act 2008 Schedule 7, and the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, HM Treasury Sanctions Notices and News Releases, now incorporated in the Money Laundering Regulations 2017 and the Criminal Finances Act 2017.
2. The purpose of this Policy is to outline how the University and its staff will manage money laundering risks, apply ‘Know your Customer’ principles and comply with the relevant legislation.

Scope

7. This Policy applies to all members of University staff, including students acting as employees of the University, and associated parties, including members of the Board, and covers University activities undertaken in the UK or overseas. Money laundering legislation applies to all employees of the University.
8. Breach of this Policy may constitute a disciplinary offence for staff and will be subject to investigation under the University’s disciplinary procedures. This may lead to disciplinary action, including dismissal. Failure to comply with this Policy may expose staff to the risk of being personally liable to prosecution. In the event that a student also acting as a member of staff should breach this Policy, the University reserves the right to also invoke the Disciplinary Procedure for Students.
9. Non-compliance with this legislation carries financial and reputational penalties for both the University and its staff. While the risk to the University of contravening the legislation is considered to be low, it is extremely important that all staff are familiar with their legal responsibilities as serious criminal sanctions may be imposed for breaches. The key requirement for employees is to promptly report any suspected money laundering activity to the Money Laundering Reporting Officer (MLRO).

Money Laundering Prevention

Transaction Record Maintenance

10. Departments conducting relevant transactions must maintain records for at least six years of:
    1. Student/Customer identification evidence.
    2. Details of financial transactions carried out.
11. Each area routinely creates and retains records in the course of normal business, and these are sufficient for the purposes of transaction record maintenance.

Procedure for Reporting Suspicious Activity

12. The legislation requires the University to disclose when it has actual knowledge or suspicion of money laundering but also if, given the circumstances, it should have reached that conclusion and failed to do so. The University should be familiar with the type of customer that normally approaches it for business, and how these customers normally engage with the University. Suspicion may arise if a customer seeks to engage in a manner that differs from the University’s typical experience, or if a customer makes requests that are out of the ordinary for the type of business concerned. If suspicion arises, members of staff should forward their concern to the MLRO immediately. Examples of suspicious activity are given in Appendix A: Anti-Money Laundering Guidance.

Customer Identification or ‘Know Your Customer’ Procedures

13. When taking orders for business from customers in respect of work that counts as ‘relevant business’, staff must be reasonably satisfied as to the identity of the customer with which they are engaging. It is important that due diligence controls are in place to identify the student, customer or other party dealing with the University. Satisfactory evidence of identity must be obtained. Examples include passport; visa and birth certificate; correspondence with students at their home address and for third parties; letters or documents proving name, address and relationship. If an organisation is not known to the University, letter-headed documents, company websites, credit checks and established contact with key sponsors are good practice that help to verify validity of contact. Cheques drawn on an unexpected or unusual source should always be verified regarding validity of the source.

Anti-Money Laundering Risk Assessment

14. The MLRO maintains the University’s Anti-Money Laundering Risk Assessment and makes recommendations for updates as appropriate to the Audit Committee, who reviews the risk assessment on an annual basis. The Money Laundering Regulations 2017 require the University to undertake a risk assessment, encompassing four key areas of risk, which are considered in assessing the overall risk level.
    1. Product/Service Risk: risk associated with the delivery of University activity, including teaching, research, knowledge exchange, fundraising and events & conferencing.
    2. Jurisdiction Risk: risk associated with the geographical reach of the University’s activities, including the countries in which its international students, strategic academic partners, alumni and donors, agents and suppliers are based.
    3. Customer, Third Party/Donor Risk: risk associated with the individuals and/or third party organisations with whom we do business, including our customers, academic partners, contractors, agents and suppliers. Politically Exposed Persons and Sanctioned Parties are also considered within this risk.
    4. Distribution Risk: risk associated with how we deliver our products and services, including in-person, digital/online and telephony.

Training

15. Adequate training is given to staff on anti-money laundering procedures and policies, including how to report/disclose suspicious activity. The University has identified the following departments as being at higher risk of encountering money-laundering activities and ensures that they receive appropriate training: Finance & Admissions. All members of these teams are required to read the Policy on an annual basis and confirm to the MLRO that they have done so.

Money Laundering Reporting Officer

16. The Money Laundering Reporting Officer develops and maintains the University’s anti-money laundering procedures and receives, considers and reports, as appropriate, on any disclosure of suspicious activities by staff. The University has appointed the Director of Finance as its MLRO.

Procedure for Reporting and Investigating Suspicious Activity

17. Potentially any member of staff could be committing an offence under the money laundering laws if they suspect money laundering is taking place, or if they become involved in some way, and do not take appropriate action. If any individual suspects that money laundering activity is or has taken place, or if any person becomes concerned about their involvement, it must be disclosed as soon as possible to the University’s Money Laundering Reporting Officer (MLRO).
18. If a member of the University community knows or suspects that money-laundering activity is taking or has taken place, or they become concerned that their involvement in a transaction may amount to a breach of this Policy and associated money laundering regulations, this information must be disclosed immediately to the MLRO.
19. Disclosures are made on the Anti-Money Laundering Form and should be submitted the same day that suspicions or knowledge of money laundering arise. If a member of the University community fails to disclose knowledge or suspicions of money laundering in a timely manner, they may be personally liable to prosecution under the money laundering regulations.
20. Disclosure reports should contain as much detail as possible, including:
    1. Full available details of all parties involved, including individuals, companies, members of the University community, if relevant.
    2. Full details of the transaction(s) and the nature of each party’s involvement in the transaction.
    3. Suspected type of money laundering activity or use of proceeds of crime, with exact reasons as to why these activities are suspicious.
    4. The date(s) of transaction(s), where they were undertaken, how they were undertaken, and the likely amount of money or assets involved.
    5. Any other relevant information.
21. To avoid committing the offence of tipping off, once a disclosure report has been submitted no further enquiries regarding the situation should be made, nor should any concerns or suspicions be discussed with others unless instructed to do so by the MLRO.
22. The University will not consider unsubstantiated reports that it regards as vexatious or malicious. Reports of this nature may result in disciplinary action under the University’s disciplinary procedures. A vexatious report is one that is pursued, regardless of its merits, solely to harass, annoy, or subdue somebody; something that is unreasonable, without foundation, frivolous, repetitive, burdensome, or unwarranted.
23. Upon receipt of a disclosure report, the MLRO notes the date of receipt, acknowledges receipt of the disclosure report, and advises the individual(s) involved as to when a response from the investigation can be expected. The MLRO considers the report and additional information including but not limited to:
    1. related transaction patterns and volumes
    2. the duration of any business relationship(s)
    3. the quantity and nature of any one-off transactions and linked one-off transactions
24. The MLRO carries out further enquiries as necessary to investigate the matter. Enquiries are conducted in a discreet manner so as to avoid disclosing the investigation to any parties involved.
25. The MLRO reports all suspected incidents of money laundering to the relevant authorities. In accordance with the Proceeds of Crime Act, a Suspicious Activity Report is forwarded to the National Crime Agency.
26. The MLRO exercises discretion in determining whether to suspend a transaction whilst any report to the relevant authorities is made. All disclosures and relevant documentation are retained in a confidential file by the Director of Finance for a minimum of six years.

Roles and Responsibilities

27. Any member of staff or associated party who suspects that money laundering activity is or has taken place, or becomes concerned about their involvement in a transaction must disclose this, in writing, as soon as possible to the University’s MLRO, according to the procedure outlined within this document. Individuals must then cooperate fully with any subsequent investigations, whilst maintaining confidentiality about the suspected activity.
28. The MLRO is responsible for developing and maintaining appropriate anti-money laundering procedures and for receiving, considering and reporting, as appropriate, on any disclosure of suspicious activities by staff. The MLRO will investigate all reports or disclosures in accordance with the procedure outlined above. The MLRO is responsible for suspending a transaction and making a Suspicious Activity Report to the National Crime Agency, if there is a suspicion of terrorist financing or money laundering. The MLRO is responsible for maintaining a Register of Disclosure Forms and Suspicious Activity Reports.
29. The Director of Academic Services is responsible for ensuring that a ‘Reportable Event’ report is submitted to the Office for Students, if appropriate, in line with the University’s ongoing conditions of registration obligations.
30. The MLRO is responsible for undertaking an annual review of the University’s Anti-Money Laundering Risk Assessment and for ensuring that the Policy is reviewed on a three-year cycle, or as new legislation prompts a review.

Related Policies and Procedures

31. Financial Management Strategy
32. Public Interest Disclosure Policy (Whistleblowing Policy)
33. Risk Management Strategy
34. Staff Disciplinary Procedure

Version History

Appendix A: Anti-Money Laundering Guidance

This Guidance is to be read in conjunction with Northeastern University London’s (the University’s) Anti-Money Laundering Policy and Risk Assessment.

Examples of Risk Areas

Instances of suspected money laundering are likely to be rare given the nature of services provided by the University. The following are examples of activities where colleagues should be alert to the risks of money laundering:

New Customers

• Is checking their identity proving difficult? Is the customer reluctant to provide details?
• Is there a genuine reason for using the services of the University?
• Is the customer trying to introduce intermediaries to potentially protect their identity or hide their involvement?

All Customers

• Is the customer requesting a large cash transaction, – especially where cash is used notes and/or in small denominations?
• Is the customer requesting cash in large denomination notes?
• Is the source of the cash known and reasonable?
• Where transactions involve international transfers or foreign currency, is the explanation for the business and the amount involved reasonable?
• Are there any unusual requests for collection or delivery?
• Are there requests for cancellation, reversal, or requests for refunds of earlier transactions?
• Are there overpayments with no credible explanation?
• Does the customer lack proper paperwork including a VAT number and the company’s registered address and number?

Regular and Established Customers

• Is the transaction reasonable in the context of the normal business of this customer?
• Is the size and frequency of the transaction consistent with the normal activities of the customer?
• Has the pattern of transaction changed since the business relationship was established?