Money laundering supervision: nominated officers and employee training
How to appoint a nominated officer and train employees to comply with Money Laundering Regulations.
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. You must act as the nominated officer yourself if you’re a regulated sole trader with no employees.
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.
The role of the nominated officer
Your nominated officer’s role is 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’re 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 National Crime Agency (NCA) by completing and submitting a Suspicious Activity Report
- asking the NCA for a defence to a money laundering offence in relation to the transactions that they’ve 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 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
Larger and more complex businesses must appoint a member of the board or senior management to act as a compliance officer and will be responsible for your compliance obligations.
Further guidance can be found at Money laundering supervision: guidance for money service businesses.
Who you can appoint as your 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
The role of nominated officer should not be held by an external consultant.
Money service businesses and trust or company service providers
The nominated officer must also pass the ‘fit and proper’ test if your business is a money service business or a trust or company service provider. Money service businesses include businesses like bureaux de change, money transmission businesses and cheque cashers.
If the nominated officer is away
You can temporarily delegate the nominated officer’s responsibilities to someone else if they are absent. This doesn’t relieve the nominated officer of their overall responsibility.
You must 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.
Training your employees to comply with the Money Laundering Regulations
You must make sure any employees are 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 them. They should understand how your anti money laundering policies and procedures affect them. You must have your anti money laundering policies, controls 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, controls, 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
You must keep a record 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 that your business is giving its staff the money laundering training they need.
Published: 2 October 2014
Updated: 26 June 2017
- This guidance has been updated to reflect legislation changes effective from 26 June 2017.Larger and more complex businesses must appoint a member of the board or senior management to act as a compliance officer and will be responsible for your compliance obligations.
- First published.