Money Laundering Policy

1. Introduction

SHAX is committed to preventing money laundering and terrorist financing. This policy outlines our approach to compliance with the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017) and the Proceeds of Crime Act 2002 (POCA), as applicable to Scottish charities.

2. Legal Framework

Our policy is based on the following legislation and guidance:

• Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017
• Proceeds of Crime Act 2002 (POCA)
• Terrorism Act 2000
• Charities and Trustee Investment (Scotland) Act 2005
• Office of the Scottish Charity Regulator (OSCR) guidance
• Charity Commission for England and Wales guidance (where applicable)

3. Risk Assessment

We have identified the following areas of potential risk:

• Cash donations and collections
• Large or unusual donations
• Anonymous donations
• International donations and transfers
• Donations from high-risk jurisdictions
• Donations from politically exposed persons (PEPs)
• Donations from corporate entities

4. Due Diligence Procedures

We implement the following due diligence measures:

• Customer Due Diligence (CDD) for donations over £1,000
• Enhanced Due Diligence (EDD) for high-risk donors
• Simplified Due Diligence for low-risk donations under £100
• Ongoing monitoring of donor relationships
• Documentation and record keeping for 5 years

5. Donor Identification and Verification

For donations requiring due diligence, we collect and verify:

• Full name and address of the donor
• Date of birth (for individuals)
• National Insurance number or passport details
• Company registration number (for corporate donors)
• Source of funds declaration
• Purpose of donation

6. Suspicious Activity Reporting

We are required to report suspicious activity to the National Crime Agency (NCA) via the UK Financial Intelligence Unit (UKFIU). Suspicious indicators include:

• Donations that seem inconsistent with donor's known income
• Multiple small donations that appear to avoid thresholds
• Donations from high-risk jurisdictions
• Reluctance to provide identification or source of funds
• Unusual payment methods or patterns
• Donations from politically exposed persons without proper clearance

7. Staff Training and Awareness

All staff and volunteers receive training on:

• Money laundering and terrorist financing risks
• Due diligence procedures and requirements
• Suspicious activity indicators
• Reporting procedures and legal obligations
• Record keeping and documentation requirements
• Penalties for non-compliance

8. Record Keeping

We maintain records for a minimum of 5 years from the date of the transaction, including:

• Donor identification documents and verification
• Transaction records and supporting documentation
• Risk assessments and due diligence reports
• Suspicious activity reports (SARs) submitted
• Training records and compliance monitoring

9. Compliance Monitoring

Our compliance program includes:

• Regular internal audits and reviews
• Monitoring of donation patterns and trends
• Review of high-risk transactions and relationships
• Annual policy review and updates
• Staff training assessments and refresher courses

10. Reporting to Regulators

We maintain appropriate relationships with:

• Office of the Scottish Charity Regulator (OSCR)
• National Crime Agency (NCA) - UKFIU
• HM Revenue & Customs (HMRC)
• Charity Commission for England and Wales (where applicable)

11. Whistleblowing

We encourage staff and volunteers to report concerns about money laundering or terrorist financing. Reports can be made:

• To our designated Money Laundering Reporting Officer (MLRO)
• Through our confidential whistleblowing procedures
• Directly to the National Crime Agency if necessary

12. Contact Information

For questions about this policy or to report concerns, please contact our Money Laundering Reporting Officer (MLRO):

• Email: info@shax.org.uk
• Phone: 01387 245 358
• Address: Merrick House, The Crichton, Bankend Road, Dumfries DG1 4TA