The government worries about accountants, bookkeepers, insolvency practitioners (and other professionals) who may be ‘professional enablers’. I know that you will say you are not one of them. You would not dream of assisting a criminal to, for example, launder the proceeds of his crime. You are not dishonest. You are not in any way dodgy.
Actually that is not what they mean by a ‘professional enabler’ – or at least that is not everything that they mean. There are a small minority of accountants who are deliberately engaged in helping criminals transfer, use or hide their ill-gotten gains. Of course they are professional enablers and government is concerned about them.
But the term ‘professional enabler’ is also used by government and law enforcement to refer to honest accountants whose services are abused by criminals. These unwitting ‘professional enablers’ may have inadequate AML systems and procedures which fail to detect, or respond appropriately to, red flags – signs of increased money laundering risk or indications that things are not what they appear – that their client is presenting a false or incomplete picture to them.
The government has announced plans to transfer the responsibilities for AML supervision of accountancy service providers, tax advisers, auditors, insolvency practitioners, bookkeepers and trust or company service providers (TCSPs) to the Financial Conduct Authority (FCA). That will not happen immediately and we can expect over time that the shape of AML supervision by the FCA with become clearer. For the present we may gaze into a crystal ball.
I do expect that the FCA will not be fixated on tax evasion as the most important predicate crime generating proceeds to be laundered. They will be interested in fraud (including investment fraud), false accounting and theft, bribery and corruption, international transactions and sanctions, and terrorist property offences. We should expect the NCA to provide the FCA with copies of Suspicious Activity Reports filed by accountants and TCSPs.
Also the FCA may be expected to be keen to apply ‘fit and proper’ tests (which currently apply to BOOMs – Beneficial Owners, Officers and Managers – of TCSPs) to BOOMs of accountancy service providers; but that should not cause too many problems.
One interesting suggestion is that the FCA may publish a complete list of the accountancy service providers and TCSPs which it supervises. It will then be a simple matter for any member of the public to check that they are dealing with a supervised entity. The expectation is that there will be more than 50,000 of these.
It does appear as if regulation for accountants is continuing to become more complicated as they answer to the FCA as well as their professional body, HMRC and the Information Commissioner.
If you are concerned that your firm’s AML compliance is inadequate, or even non-existent, get in touch now using the link below and we can work together to fix this. The hardest part is getting started.
