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Anti -Money Laundering Policy June 2021

Appendix B Possible signs of money laundering

Types of risk factors which may, either alone or along with other factors suggest the possibility of money laundering activity:


  • a new customer with no previous 'history' with the Council
  • a secretive customer: for example, one who refuses to provide requested information without a reasonable explanation
  • concerns about the honesty, integrity, identity of a customer
  • illogical third party transactions: for example, unnecessary routing or receipt of funds from third parties or through third party accounts
  • involvement of an unconnected third party without logical reason or explanation
  • payment of a substantial sum in cash (but it's reasonable to be suspicious of any cash payments particularly those over £1,000)
  • overpayments by a customer
  • absence of an obvious legitimate source of the funds
  • movement of funds to/from overseas, particularly to and from a higher risk country
  • where, without reasonable explanation, the size, nature and frequency of transactions or instructions is out of line with normal expectations
  • a transaction without obvious legitimate purpose or which appears uneconomic, inefficient or irrational
  • cancellation or reversal of an earlier transaction
  • requests for release of customer account details other than in the normal course of business
  • poor business records or internal accounting controls
  • a previous transaction for the same customer which has been, or should have been, reported to the MLRO.

Property matters

  • unusual property investment transactions with no apparent investment purpose
  • instructions to receive and pay out money where there is no linked substantive property transaction involved (surrogate banking)
  • regarding property transactions, funds received for deposits or prior to completion from an unexpected source or where instructions are given for settlement funds to be paid to an unexpected destination.

The following table sets out the types of activities that might be suspicious and where the council may be susceptible to money laundering activities. It is not intended to be exhaustive, and just because something is not on the list, it doesn't mean that it shouldn't be reported.

ActivityThe types of activity that may be affected
New customers with high value transactions
  • selling property to individuals or businesses
  • renting out property to individuals or businesses
  • entering into other lease agreements
  • undertaking services for other organisations
Secretive clients
  • housing benefit claimants who have sums of money entering into /out of their bank account (even if we do not award them benefit, we should still consider money laundering implications)
  • people buying or renting property from the council who may not want to say what it is for
  • people receiving grant funding who refuse to demonstrate what funding was used for
Customers who we think are acting dishonestly or illegally
  • people paying for council services who do not provide details about themselves
  • people making odd or unusual requests for payment arrangements Illogical transactions
  • people paying in cash then requesting refunds
  • requests for the council to pay seemingly unconnected third parties in respect of goods / services provided to the council
  • requests for the council to pay foreign currencies for no apparent reason
  • payments of substantial sums by cash
  • large debt arrears paid in cash
  • refunding overpayments
  • deposits / payments for property
  • movement of funds
Payments of substantial sums by cash
  • large debt arrears paid in cash
  • refunding overpayments
  • deposits / payments for property
Movement of funds overseas
  • requests to pay monies overseas, potentially for "tax purposes"
Cancellation of earlier transactions
  • third party "refunds" grant payment as no longer needed / used
  • no payment demanded even though goods / services have been provided
  • sudden and unexpected termination of lease agreements
Requests for client account details outside normal course of business
  • queries from other companies regarding legitimacy of customers
  • council receiving correspondence /information on behalf of other companies
Extensive and overcomplicated client business structures /arrangements
  • requests to pay third parties in respect of goods / services
  • receipt of business payments (rent, business rates) in settlement from seemingly unconnected third parties
Poor accounting records and internal financial control
  • requests for grant funding / business support indicates third party not supported by financial information
  • companies tendering for contracts unable to provide proper financial information / information provided raises concern
  • tender for a contract which is suspiciously low
Unusual property investment or
  • requests to purchase Council assets / land with no apparent purpose
  • requests to rent Council property with no apparent business motive
Overcomplicated legal arrangements / multiple solicitors
  • property transactions where the Council is dealing with several different parties


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