Anti-Money Laundering (AML) – A refresher

What is money laundering?

At its simplest, it’s “doing stuff” in relation to proceeds of crime. Criminal activity creates criminal property and doing anything connected to this criminal property is likely to be money laundering.

Criminal property doesn’t just mean physical property, it could also be, for example, the reduction in a liability. The UK has an all crimes approach to money laundering.

Are you conducting a service that is regulated for AML?

If you are providing accountancy services by way of business then, whilst undertaking that business, you are regulated. It’s only when you are providing these services to a client and not
when you are an employee.

Accountancy Service Providers include accountancy and bookkeeping, tax advice, insolvency and auditing. AML Guidance for the Accountancy Sector (AMLGAS) adds further detail to the Money Laundering Regulations 2017 definition of an external accountant.

“1.2.2… for the purposes of this guidance it includes any service which involves the recording, review, analysis, calculation or reporting of financial information, and which is provided under arrangements other than a contract of employment.”

“Tax adviser”….provides advice about the tax affairs of other persons, when providing such services.

AMLGAS is adopted by the accountancy AML supervisors (including HMRC) and is HM Treasury approved. If you provide services regulated for AML, then you will need to be supervised.

A link to AMLGAS can be found here: www.ccab.org.uk/documents/FinalAMLGuidance2018Formattedfinal.pdf.

Reporting to the NCA (National Crime Agency)

If you form a suspicion or have knowledge of money laundering (or have grounds for either) it should be reported to the National Crime Agency (NCA). A regular topic is client errors.

Please read AMLGAS 6.1.14. It explains that if you find a client error that you believe to be a true error, and it’s quickly corrected, then it is less likely to be reportable.

A practical guide to AML compliance and risk management

AML is a mindset that will protect your firm. The real cost of AML is time and resource. If you want to stay in practice and out of jail, it’s essential you get it right!

When considering any AML situation, imagine there’s an independent person reviewing your actions and casting their eye over your decision making. If you’re questioning your own decision
making, ask yourself what the independent person would say?

WE LOVE AMLCC – The steps to AML success.

W Write it down: If it’s not written down, it didn’t happen. You’ll need a firm policy, firm risk assessment and risk assessments for all clients; all documented.
E Educate and train: Training for everyone is essential; why take the risk that something is missed?
L Look out for a visit: Your AML supervisor may visit but don’t forget that the Police, Trading Standards and HMRC are amongst others that could request AML evidence.
O Operational and organisational: AML is part of virtually everything that happens within a firm. Many aspects of your existing procedures will need only slight amendments to be AML compliant.
V Verify and identify: You need to know who your clients are and verify that fact.
E Evaluate risk: What is the actual risk to your firm of being exposed to money laundering? Your documented risk assessments give you scope to mitigate identified risks.
A Allocate resources: There’s no denying that there is a time and effort requirement to achieve compliance. The biggest step will be to get everything in place; once done it will fall as part of your routine procedures and place less of a burden.
M Monitor and update: AML is not set and forget. As your client’s change, your firm changes and recognised sector risks change, so must your AML approach.
L Law enforcement need to know: Reporting to the National Crime Agency is the end result of effective AML procedures. If you are asking yourself, is there a crime and are there proceeds, then it’s time to consider if a report should be made.
C Counter terrorist financing: Though a different goal to money launderers, many of the methods overlap.
C Choose your clients, to match your risk appetite: You may have one client that makes you feel slightly worried about what the client is up to. Either get the client to fall in line or move them on – is a report required?

Thank you to Richard Simms FCA from AMLCC for providing this article.

AMLCC is an Anti-Money Laundering compliance software which can be used to ensure you are compliant with the regulations. It includes online client record storage, client risk assessment tool, video training, testing and certification, a compliance manual and much more. AMLCC is available for free to all Members in Practice who are supervised by the IAB. For further information and to register to use AMLCC (if you haven’t already) please visit: www.iab.org.uk/member/amlcc-anti-money-laundering-compliance/and login to the Members’ Area.

 

Supervision with the IAB

To comply with the Money Laundering Regulations 2017 all self-employed bookkeepers must have anti-money laundering (AML) supervision in place. As the IAB is an approved AML supervisor, all members in the UK to whom the regulations apply, must activate their AML supervision with the IAB by applying for an IAB practising certificate or Certificate of AML Supervision. This also brings other benefits such as access to guidance and additional resources. If you require supervision or have any queries about your supervision please visit: www.iab.org.uk/join-the-iab/importantinformation-self-employed-bookkeepers. You can also contact the compliance team: compliance@iab.org.uk or 01732 897750

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