Modern Slavery Act 2015
the requirement to have in place effective systems
and controls to prevent the laundering of criminal
proceeds.
However, despite the existence of sophisticated
systems and the understanding within the sector
around such requirements, regulators continue to
uncover shortcomings and failings in the systems of
even the biggest banks.
From a compliance perspective, the introduction of the
SCTS reporting requirement component of the Act has
the potential to further increase the complexity of the
screening processes for transactions in the regulated
sector.
Critically, the introduction of the SCTS will alert
businesses in the regulated sector to issues existing
across complex and multijurisdictional supply chains.
The contents of a SCTS will provide regulated
business with considerably more information about
the way in which their clients operate than previously
required, putting banks ‘on notice’ of potential issues.
This new information will be important for compliance
officers and regulators in assessing whether there
are ‘reasonable grounds to suspect’, and when
a suspicious activity report is required. A further
important consequence of these developments is that,
because the SCTS will be new information, regulated
business will be required to reassess the correct riskrating attached to companies that, up to now, would
have been regarded as low risk.
Key steps for banks and financial institutions to action
include:
„„
Training staff on Modern Slavery issues
„„
Revising Client Due Diligence requirements
„„
„„
„„
„„
„„
Revising risk assessments to include Modern
Slavery issues
Understanding the architecture of criminal
organisations involved in Modern Slavery
Identifying Modern Slavery ‘red flag’ issues
Developing in-house expertise in analysing SCTS
reports
Ensuring systems are in place to collect and
analyse SCTS reports for all affected customers
If you have questions concerning the contents of this Alert, or would like more information about The Modern Slavery Act 2015,
please speak to your regular contact at Weil, or to:
Simon Taylor (London)
Bio Page
simon.taylor@weil.com
+44 20 7903 1141
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Weil, Gotshal & Manges
November 2015
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