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Money Laundering?

including wills and probate
krobaa
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Money Laundering?

#168952

Postby krobaa » September 25th, 2018, 7:27 pm

Bit of a rant I'm afraid.
Earlier this year I gave my daughter a substantial sum of money (over200K) as I was about to have major surgery which carried some risk and I wanted her to benefit from this as my will left everything to my wife and they do not always get on. This was in Feb this year. All monies were electronically transferred from my bank to her bank
Obviously I'm OK but my daughter decided to move to a bigger property.
Completion is due Friday and their conveyancer has just informed her that I need to provide a letter confirming the gift, give a certified copy of my passport and provide copies of bank statements to prove that I had the money to give her. Failure to do so would mean they would not complete although they have all the monies to do so. We live in different parts of the country.
I am somewhat perplexed by this. Surely the banks are covered by the same legislation and that should be sufficient for money laundering purposes. I want to help my daughter but I do not want to provide information to a conveyancer who is just following some dumb [expletive deleted] protocol.
I often have given reasonable sums away to my children and grandchildren without any problem, so what gives with these people?
Perplexed
krobaa

johnhemming
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Re: Money Laundering?

#168954

Postby johnhemming » September 25th, 2018, 7:36 pm

Some of the rules are a bit odd and some of the ways people implement the rules is odd. I had a problem buying a house through auction where I was paying cash (it was not that expensive). Part way through the transaction the auctioneer refused to complete for some silly analysis of money laundering rules. I ended up having to instruct solicitors merely to pass the money laundering interpretation. Some years down the line I have given up on the idea of taking action against the auctioneers simply because I am too busy.

In the end it is sometimes best to go through the motions because arguing creates too many difficulties. I argue quite a bit about things, but not always.

gryffron
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Re: Money Laundering?

#169013

Postby gryffron » September 25th, 2018, 10:28 pm

The money laundering regs are a bit of a joke. Unfortunately, a very annoying one.

The regulations say that banks and solicitors must "satisfy themselves" that the money passing through their hands is legit. The legislation gives no hint to them how they might do this. And the penalties to them if they are found to have handled dodgy money are nasty.

So every firm does something different. Often requiring documents that some people cannot provide.

HOWEVER
It is a really good idea to document a gift anyway, mostly for IHT purposes. But especially if there is likely to be a future dispute about a will (e.g. wife claiming it was a loan not a gift). A short letter from the donor to the recipient accompanying the gift is usually sufficient. So proving it now, to the satisfaction of these legal-eagles, might actually save a lot more trouble for your daughter in the long run.

Gryff

Urbandreamer
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Re: Money Laundering?

#169053

Postby Urbandreamer » September 26th, 2018, 7:14 am

It's also worth remembering that people HAVE gone to jail and their lives ruined because they didn't make others jump through the hoops. Or who trusted that others had made them do so.

https://www.lawgazette.co.uk/news/solic ... 16.article

By all means rant on, I agree with you.

But recognise that those involved have to act as they do or they will face serious consiquences. The people to complain to or about are those who passed the law, not those subject to it.

krobaa
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Re: Money Laundering?

#169113

Postby krobaa » September 26th, 2018, 11:20 am

Urbandreamer wrote:It's also worth remembering that people HAVE gone to jail and their lives ruined because they didn't make others jump through the hoops. Or who trusted that others had made them do so.

https://www.lawgazette.co.uk/news/solic ... 16.article

By all means rant on, I agree with you.

But recognise that those involved have to act as they do or they will face serious consiquences. The people to complain to or about are those who passed the law, not those subject to it.


The point I was trying to make was that the money was gifted and not connected to the house purchase. Surely MLR relating to me applies at the first point of transfer i.e. the responsibility of the banks involved. If I was contributing specifically for the deposit directly to the conveyancer I can understand
they have to go through some due diligence.
What annoys me is when an organisation produces an onerous protocol on top of that required by the legislation and applies to all cases indiscriminately. These layers of bureaucracy on bureaucracy created by back office lawyers who do not have to deal with the consequences of their over interpretation of the legislation puts costs up dramatically. I remember going through a torturous process with some of my stockbrokers a few years ago which turned out to be unnecessary. And of course it is the client who pays for this puffed up fluff. Of course I have supplied the information as the threat not to complete would be too upsetting for my daughter. Like johnhemming pushing back is in the too hard basket sometimes although I often have a go because if people do not then the bureaucrats win.

Alaric
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Re: Money Laundering?

#169120

Postby Alaric » September 26th, 2018, 11:32 am

krobaa wrote: I remember going through a torturous process with some of my stockbrokers a few years ago which turned out to be unnecessary.


Selftrade presumably. They eventually backed down, but it was never really discovered whether this was their home made interpretation or one that a government or quasi government agency had put them up to.

Parliament is at least partly responsible, they shouldn't vote this stuff into law.

dionaeamuscipula
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Re: Money Laundering?

#169121

Postby dionaeamuscipula » September 26th, 2018, 11:34 am

krobaa wrote:
The point I was trying to make was that the money was gifted and not connected to the house purchase. Surely MLR relating to me applies at the first point of transfer i.e. the responsibility of the banks involved. If I was contributing specifically for the deposit directly to the conveyancer I can understand
they have to go through some due diligence.

Concur on the stupidity of many money laundering rules. RBS have 3,000 people in their money laundering compliance department, none of which add any value to the bank other than to enable them to tick the right boxes and therefore prevent fines. HSBC are renowned to be really risk averse in this area - and many others - since they got done for issues in Mexico a few years ago.

Your daughter will have been asked where her funds came from. She will have said that they were a gift. This will have triggered them pushing up the line for proof that it really was a gift (and not, say, proceeds of crime), and that the gift came from you and not some mafia kingpin (assuming of course that you are not). There will be some sort of de minimis, but it is probably a twentieth of the sum you have gifted.

DM

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Re: Money Laundering?

#170665

Postby Clitheroekid » October 2nd, 2018, 1:07 am

Unfortunately, this is yet another example of stupid solicitors not having a clue what they're doing.

All they need to be satisfied about is that your daughter acquired the money legitimately, and they already have the necessary evidence that it came from you.

Unless you're a well-known convicted fraudster they have neither the need nor the right to enquire as to how you acquired the money. What if you'd also received it as a gift? Would they then make the same enquires about your benefactor? When would it stop?

They've also compounded their ignorance by leaving MLR enquiries till the last minute. Such matters should always be covered at the point of being instructed. Has your daughter exchanged contracts? If so, are they seriously suggesting that they would force your daughter to break the contract with all the horrendous consequences that would ensue simply because of their ineptitude?

Even if she hasn't yet exchanged it's still ludicrously late. You might be overseas, perhaps forming yet another offshore company in the Seychelles, or for any number of reasons be unable to provide the information before Friday.

If I were you I would simply point out that having taken legal advice yourself you are under no obligation to provide this information and that they are requesting confidential information to which they have no right. If they argue, ask them to point out the specific legislation that they mistakenly believe requires them to obtain the information (it's actually Regulation 28(11)(b) of the Money Laundering Regulations 2017, but don't tell them!) ;)

However, I do realise that it's sometimes easier to comply with stupidity and ignorance rather than fight it, so if they haven't committed themselves by exchanging contracts I'd initially respond as suggested. However, if they really are dumb enough to mess up your daughter's completion I'd comply under protest just for her sake but accompany the information by a formal complaint in the hope it might deter them from such cretinous behaviour with other clients.

You may wish to quote the advice directly from The Law Society:

The law does not require you to prove that the money is clean. You have to be satisfied that it is consistent with the risk profile of the client and that where there are warning signs, they do not give rise to a suspicion of money laundering.

Therefore, if a person's wealth is clearly derived from legitimate means such as an inheritance, house sale or investment windfall and they are engaging in a transaction which is consistent with that wealth, you are not required to dig through their entire financial history to see if they ever committed an offence of any description.

krobaa
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Re: Money Laundering?

#170722

Postby krobaa » October 2nd, 2018, 10:05 am

Clitheroekid wrote:Unfortunately, this is yet another example of stupid solicitors not having a clue what they're doing."


Thank you Clitheroekid for confirming my belief that this was unnecessary.
Contracts had already been exchanged some time before and this request came at the last minute and they gave me less than 24 hours to comply. I phoned up to complain and they were adamant that they would not complete although they had the money and they knew the money was transferred between two UK banks. The point I made to them was that the banks come under the same legislation and they were OK with the transaction when it was made in February probably because my daughter and I have a long history with each of our respective banks.
Anyway I am pleased to report that my daughter and her family have completed and are enjoying their new house. I think this was more of a jobsworth process from a conveyancer and would be surprised if a solicitor was involved at all.
krobaa

Infrasonic
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Re: Money Laundering?

#170876

Postby Infrasonic » October 2nd, 2018, 4:17 pm

krobaa wrote:
Clitheroekid wrote:Unfortunately, this is yet another example of stupid solicitors not having a clue what they're doing."


Thank you Clitheroekid for confirming my belief that this was unnecessary.
Contracts had already been exchanged some time before and this request came at the last minute and they gave me less than 24 hours to comply. I phoned up to complain and they were adamant that they would not complete although they had the money and they knew the money was transferred between two UK banks. The point I made to them was that the banks come under the same legislation and they were OK with the transaction when it was made in February probably because my daughter and I have a long history with each of our respective banks.
Anyway I am pleased to report that my daughter and her family have completed and are enjoying their new house. I think this was more of a jobsworth process from a conveyancer and would be surprised if a solicitor was involved at all.
krobaa


A solicitor I spoke to a few weeks ago in relation to my mums house sale warned me about some of her recent experiences with the online EA's and their shoddy conveyancing procedures. I've got one doing a valuation on Thursday as well a couple of bricks and mortar independents, but I'm minded to keep the conveyancing local with the solicitor, even if it costs more.

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Re: Money Laundering?

#175149

Postby Dendyver » October 20th, 2018, 9:52 am

Whenever I am told it is a requirement of money laundering regulations to provide some documentation, I always retort, "the only money launderers I know are the government and ironically you seem to be acting as an agent for them"

dionaeamuscipula
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Re: Money Laundering?

#175173

Postby dionaeamuscipula » October 20th, 2018, 12:15 pm

Dendyver wrote:Whenever I am told it is a requirement of money laundering regulations to provide some documentation, I always retort, "the only money launderers I know are the government and ironically you seem to be acting as an agent for them"

Good luck with that.

DM


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