How is Private Equity & Real Estate funds benefiting from Anti-Money Laundering software during Covid-19?

18th June 2020 3778 - Blog Posts

The Covid-19 pandemic has led to unprecedented global challenges and economic disruption. It has also led to an increase in Covid-19-related crimes, including fraud, cybercrime, misdirection or exploitation of government funds or international financial assistance. 

This is impacting on the ability of government and the private sector to implement anti-money laundering (AML) obligations in areas including supervision, regulation and policy reform, suspicious transaction reporting and international co-operation – complimenting the fifth Anti money laundering directive (5AMLD) which came into force earlier this year. AML has fast become a time-consuming task for fund managers, and compliance technology is helping to streamline such obligations.

As it stands, the UK benefits from an active and dynamic business environment, supported by a limited number of restrictions on establishing a business. The ease with which a company can be established is frequently exploited by criminals who set apparently legitimate companies both within UK and offshore, but which are primarily a mechanism for laundering illicit funds. 

Moreover, the property market is another route exploited by criminals, particularly in London. Money laundered in Britian is often the proceeds of crime generated in another country; large financial centres are attractive destinations or transit points for the proceeds of crime.

As the scale of money laundering impacting the UK each year reaches £100billion, how can private equity and real estate fund managers identify possible measures to minimise their exposure to the emerging risks in the current climate?

  • Firstly, private equity and real estate fund managers must continue to ensure that client due diligence is completed – an area fully encouraged by the FCA. However, they should review their existing framework and consider whether any amendments need to be made to address widespread changes in working practices and social distancing measures.
  • Secondly, by proactively engaging with regulatory authorities, fund managers are able to identify any issues they encounter with the application of their AML procedures or satisfaction of regulatory requirements as a result of the impact of Covid-19.  
  • And finally, fund managers should continue to monitor and assess how AML risks are evolving as the global response to the pandemic develops and adapt their control accordingly. Technology is helping to support fund managers with risk reporting and data analytics.

The value of MaxComply’s AML module

With rules becoming more complex and at a time surveillance against terrorist financing is thrust into the spotlight, Lawson Conner and it’s leading compliance software MaxComply is able to fully support fund managers to meet their AML obligations. By using our managed compliance technology, such as our Anti-Money Laundering module, we can help your firm to reduce our client’s risk. We ensure that robust systems are in place and can cut down AML processing time by up to 80%.

Get in touch if you want to keep up with the ever-changing AML regulations, please click here.

Author

Joe Woodbury
Director, Investment Management Solutions

E: jwoodbury@lawsonconner.com
D: +44 (0) 203 696 2560