Sovereign duty

Denis O’Connor has worked in frontline and policy AML/CFT roles in leading financial institutions in the City of London.

I am a member of the Institute of Chartered Accountants in England & Wales (ICAEW) and I am also the Money Laundering Reporting Officer (MLRO) for an asset management firm regulated by the UK Financial Conduct Authority (FCA). I have been approached by one of my firm’s fund managers seeking a mandate from a potential new client who is a sovereign wealth fund of one of the Middle East countries. A quick check on the internet reveals that the Minister of Finance of that country is a member of the fund’s board. My fund manager is very keen that we win this account as there is a strong possibility that if things go well, we will obtain more business from the wealth fund. I have heard, through industry circles, that one other asset management firm is being considered for the mandate. However, this other firm has a reputation for rather lax money laundering controls; they have a number of somewhat dubious clients that my firm would not accept. What advice can you offer in terms of meeting and documenting our Know Your Customer obligations and complying with FCA Rules?