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Anti-Money Laundering Checks: What You Need to Know

Anti-Money Laundering (AML) checks are an important part of many businesses’ operations. You may already be familiar with them within the runnings of your own business, or you may have completed a Know Your Customer (KYC) check before, for example when opening a bank account or buying a house.

UK regulations state certain businesses and transactions are at an increased risk of being exploited for money laundering, and as such, by law, due diligence checks must be carried out before providing the service/product. At Virtual Headquarters, we take AML checks very seriously. Although, in the grand scheme of things, virtual offices may be a lower risk industry to be exploited for money laundering, we’re still strict on our checks.

anti money laundering

The statistics on money laundering

Money laundering poses a significant challenge to the UK, with the National Crime Agency (NCA) warning that it remains a major threat to national security. Shockingly, billions of pounds in suspected dirty money pass through the UK's financial systems each year, making it a prime destination for money laundering.

The UNODC estimates the amount of money laundered in one year is 2 - 5% of global GDP, but of course the true figure will never be known. Fraudsters will continue to learn and adapt, with newly emerging and more complex money laundering techniques being utilised year on year. To successfully combat money laundering, it is crucial that comprehensive and globally harmonised regulations be adopted and enforced. 

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What kind of businesses need to perform KYC checks?

There are lots of different types of businesses, in multiple sectors, that need to perform AML checks. Mostly businesses that deal with large sums of money (banks for instance) or that have been flagged as a potential risk for money laundering (virtual offices for instance) by the government. Taking these preventative measures helps the business safeguard against potential legal and financial repercussions.

Money laundering guidance and regulations from the UK government
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What is an AML or KYC check?

An AML check is a process that screens customers to essentially ensure they are who they say they are, and that their reason for obtaining the product/service is valid. This is all in an attempt to mitigate the possibility for any facilitation of money laundering and other financial crime, and to maintain the reputation of the providers client base.  

The process involves verifying the identity of the individual using the service. You’ll need to provide your photo ID and proof of address documents in order for the provider to do so. In order to corroborate the information it is likely various databases will be searched and electronic checks run, including a soft-search on your credit report. Where the customer is a business, documents will be required for the Ultimate Beneficial Owners (UBOs) of the business - and checks to verify this and your business will be run. You may also be asked certain questions in order for the service provider to understand your circumstances better, and in some scenarios (for example a Politically Exposed Person) Enhanced Due Diligence checks may be necessary.

It’s worth noting that we obtain and securely hold this information solely for the purpose of complying with the regulations, and not to share with any nasty third parties.

You can find out more about our on-boarding process specifically, and what’s required here.
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Why we impose these checks at Virtual HQ

Obviously first and foremost, this is a legal obligation. We are required to (and want to!), assist with the combatting of money laundering and financial crimes. But we’re not just doing it to protect our business, we want to ensure that we protect our customers from mixing in the same circles as these criminals and protect your company from any outside influence that could affect your reputation and the smooth running of your business. It means we can easily keep the riff-raff out and legitimate, honest businesses in (that’s you)! 

Our request for information doesn’t mean you’re suspected of anything, or that we necessarily doubt you, but keeping all customers subject to the same checks ensures we can do this to the best of our ability.

Anti money laundering

Why we’re a trusted and respected provider

When using virtual office space you are sharing a business address with many other businesses. If a business sharing your virtual address becomes implicated in unlawful practices, be it complaints of scam activity, unfair practices or at the very worst investment fraud, money laundering or even terrorist financing, it could potentially tarnish your own business reputation by association. This is due to the simple fact that perception matters in business, and if customers or partners perceive your business to be in the same sphere as a disreputable company, it could cause irreversible damage.

But at Virtual HQ, we are strict on our checks. We would never bypass the requirements for the sake of profit, and we have a low-risk appetite - meaning we don’t just turn away clients linked to confirmed criminal activity, but those with adverse media or complaints too. Our compliance team is dedicated and committed and are trained to spot anything suspicious. We continuously review and improve our onboarding process, ensuring that our process is as straightforward as possible without cutting corners. You can be safe in the knowledge that we have done our very best to ensure you are only sharing your address with the very best.

So - you might have found a provider offering virtual office services for a fraction of the price? Or a provider willing to sign you up and activate your services without obtaining your documentation? Sure, you know that your business is legitimate - but just think about who else could be sharing your address? Entrusting your business to a provider who doesn't conduct thorough AML checks can be a high-risk gamble, with your business’ reputation paying the price. 

You also most likely require an office address that is just that, a real, physical office, with manned receptions and not just a PO Box. If opting for a provider registering thousands of businesses at one address, the quality of the address will reduce. You don’t want too many cooks in the kitchen - the risk of associational reputation damage only increases! And who knows what will happen to your mail? 

We won’t register in the thousands, and mostly, we won’t even register in the hundreds. We understand the importance of a local, genuine address that will maintain that presence, and not an address that sticks out as virtual.

Find out more about our anti-money laundering checks here.

So in a nutshell …

AML checks are clearly an essential part of modern business operations. At Virtual Headquarters, we take our responsibility to safeguard our customers, partners, and the public from fraudulent and illegal activities seriously. By implementing strict AML checks, we ensure compliance and mitigate the risks of reputational, legal, and financial damage. Conducting your business with us provides you with the peace of mind that comes from knowing we’re doing our job, and doing it well.

Alexandra handles all things marketing here at Virtual HQ

Alexandra O'Hagan

Marketing Executive

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