Money laundering can be simply defined as “the act of concealing the source of illegally gotten money”. In the United Kingdom, companies have been under considerable government pressure to create and enforce anti-money laundering policies. This pressure has increased since 2007, when the Money Laundering Regulations were introduced. The following is a synthesis of practices and guidelines (formal and informal) that I have recorded in discussions on matters of corruption and money laundering with procurement and supply chain professionals.
By their nature, international procurement and supply chain transactions are at risk of abuse by parties intent on money laundering. The nature of international business necessitates currency exchange, which can conceal the origins of money. Very large one-off payments for single items, especially if unaccompanied by strong bargaining behaviour, should be treated with utmost suspicion. Effort should be made to receive payments from previously declared and authorised company bank accounts and credit cards. Requests for transfers into and out of unusual currencies, as part payments or whole, should also be treated with extreme suspicion. True cash, i.e. bundles of notes, is to be refused – there is no easier way of transferring ill gotten money and simultaneously putting the receiver at immediate high risk. ...continue reading