Is your firm’s anti-money laundering compliance 20 years out of date?
The Money Laundering Regulations 2003 first required accountants in general practice to obtain satisfactory evidence of the identity of their clients. The current requirements go far beyond that; yet I still see firms whose AML systems barely begin to engage with their current obligations.
You would not give tax advice based on the tax requirements of 2003 – but is your understanding of your firm’s AML obligations 20 years out of date?
What has changed?
The 2003 regulations simply required accountants to identify their clients, keep records of that identification and the firm’s transactions, train their staff about money laundering, and have procedures for reporting suspicions of money laundering to the firm’s nominated officer and by him to the National Criminal Intelligence Service (a forerunner of the NCA).
The 2003 regulations contained no mention of the word ‘risk’, nor expressions such as ‘beneficial owner’, ‘people with significant control’ or ‘trust or company service provider’. Back in those days tax advisers were only those who actually gave advice about their clients’ tax affairs; and at that time there was no active involvement of the professional bodies in supervising their members’ compliance with money laundering regulations.
How times have changed!
The 10 fundamental requirements now
I would say there are now ten fundamental requirements for accountants, bookkeepers and tax advisers subject to the current UK money laundering regulations.
- Registering with an anti-money laundering supervisory body
- Appointing a money laundering reporting officer (and possibly a separate money laundering compliance officer)
- Writing and updating the Firm-wide AML Risk Assessment, showing risks identified and how they are mitigated
- Preparing and updating an AML Policies, Controls & Procedures document
- Regular staff AML training & staff screening
- Client, director & beneficial owner ID verification (and checking the PSC register)
- Client AML risk assessments (based on information collected about the client and the services the firm provides to them) showing how the risks identified in relation to the client are addressed by the firm
- Ongoing monitoring of clients and regularly updating client information and risk assessments
- Reporting suspicions of money laundering, terrorist property offences or proliferation financing
- Regular independent (not necessarily external) AML compliance reviews for the firm
I would say that if you have these ten fundamentals covered and properly documented you are on your way to a ‘generally compliant’ grading at your firm’s next AML supervisory body review.
If you are concerned that your firm’s AML compliance is inadequate, out of date, 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.
