Appointing a nominated officer and training your employees

Businesses that are regulated by the Money Laundering Regulations must appoint what's known as a 'nominated officer'. The nominated officer must be someone in the business. If you're a regulated sole trader with no employees then you must act as the nominated officer yourself.

This guide explains how to appoint a nominated officer and what their role is in your business. It also explains how to train your employees to work with your nominated officer in identifying and reporting suspicious activities.

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What is the role of the nominated officer?

It's the nominated officer's role to be aware of any suspicious activity in the business that might be linked to money laundering or terrorist financing, and if necessary to report it. They are responsible for:

  • receiving reports of suspicious activity from any employee in the business
  • considering all reports and evaluating whether there is - or seems to be - any evidence of money laundering or terrorist financing
  • reporting any suspicious activity or transaction to the Serious Organised Crime Agency (SOCA) by completing and submitting a Suspicious Activity Report
  • asking SOCA for consent to continue with any transactions that they have reported, and making sure that no transactions are continued illegally

Other responsibilities you might give your nominated officer

You might decide to make your nominated officer responsible for other tasks that need to be done to make sure your business complies with the Money Laundering Regulations. For example, you could make them responsible for:

  • putting in place and operating anti-money laundering controls and procedures
  • carrying out money laundering risk assessments
  • record keeping
  • training staff in preventing money laundering

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Who can be appointed as a nominated officer?

Your nominated officer for anti-money laundering must be someone in your business or organisation. They have a very important role, so it's wise to appoint someone who:

  • can be trusted with the responsibility
  • is senior enough to have access to all your customer files and records
  • can decide independently whether or not they need to report suspicious activities or transactions - a decision that could affect your customer relations

Note that the role of nominated officer should not be held by an external consultant.

Money Service Businesses and Trust or Company Service Providers

If your business is a 'Money Service Business' or a Trust or Company Service Provider then the nominated officer must also pass the 'fit and proper' test. Money Service Businesses include businesses like bureaux de change, money transmission businesses and cheque cashers.

Applying for and taking the fit and proper test is part of the registration process for these types of regulated business under the Money Laundering Regulations. You can find out more about the fit and proper test by following the link below.

Applying for the fit and proper test

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What happens if the nominated officer is away?

If the nominated officer is absent, their responsibilities can be temporarily delegated to someone else. But this doesn't relieve the nominated officer of their overall responsibility.

It's important to make alternative arrangements in the business to cover for times when the nominated officer is away. It's recommended that you appoint an alternative officer or deputy. Make sure that all your staff are aware of the alternative arrangements and know when to use them.

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Training your employees to comply with the Money Laundering Regulations

If you have any employees you must make sure they're aware of the laws covering money laundering. In particular, employees who deal with customers - including receptionists and anyone who answers the telephone - should receive regular training to make sure your business complies with the regulations.

You should train employees on how to recognise suspicious transactions and what to do if they identify one. They should understand how your anti-money laundering policies and procedures affect them. It's a good idea to have your anti-money laundering policies and procedures written down and available to all your staff.

Make staff aware of the penalties for committing offences under the Money Laundering Regulations and related legislation.

Examples of good practice when you train your employees

Important examples of best practice in employee training include:

  • making sure all employees know who the nominated officer is and what they're there for
  • giving employees clear guidance on spotting suspicious activity and reporting it to the nominated officer or their deputy
  • explaining clearly the steps your business has taken to make sure it's not used for money laundering or terrorist financing
  • writing down all anti-money laundering policies, procedures and risk assessments, and giving employees access to them at all times - written policies also help to demonstrate that your businesses takes its obligations under the Money Laundering Regulations seriously
  • encouraging employees to refer to your written documents whenever they need to, and to get more guidance if they need it
  • making sure employees know where to go for more help or information about the Money Laundering Regulations, including guidance available on the HM Revenue & Customs (HMRC) website

It's a good idea to keep a log of all the training your employees receive. Getting employees to sign and date the log can help emphasise just how important it is that they follow their training at all times. An up-to-date training log also demonstrates to HMRC that your business is giving its staff the money laundering training they need.

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