A relevant firm must take reasonable steps to ensure that any member of staff who handles, or is managerially responsible for handling, transactions which may involve money laundering makes a report promptly to the MLRO or a person authorised by the Director General of NCIS , within the same firm or group, if he:
The steps to be taken under (1) include establishing and maintaining arrangements for disciplining any member of staff who fails, without reasonable excuse, to make a report of the kind envisaged in this section.
A relevant firm may wish to set up internal systems that allow its staff to consult with their line manager before sending a report to the MLRO. If a relevant firm sets up such systems, it should ensure that they are not used to prevent reports reaching the MLRO whenever staff have stated that they have knowledge or suspicion that a transaction may involve money laundering.
The duty in ML 4.1.2 R (Internal reporting) does not apply where the relevant firm is a professional legal adviser and the knowledge or suspicion or the reasonable grounds for knowing or suspecting are based on information or other matter which came to it in privileged circumstances.
Information or other matter comes to a professional legal adviser in privileged circumstances if it is communicated or given to the adviser:
The privileged circumstances in (2) do not apply to information or other matter which is communicated or given with a view to furthering a criminal purpose or in contravention of a provision of the regulatory system.