Anti Money Laundering news

HM Treasury has now approved the Anti-Money Laundering guidance for the accountancy sector previously published in draft format in September 2020.

HM Treasury has also approved the Tax Appendix and the Insolvency Appendix.

Anti-Money Laundering and Counter-Terrorist Financing Guidance for the Accountancy Sector May 2022

Updated CCAB AML Guidance – Explanatory notes

Supplementary Anti Money Laundering Guidance for Tax Practitioners

Appendix F: Supplementary Anti Money Laundering

CCAB note - Non-payment of tax and reportable criminal proceeds

CCAB case study for small practitioners - Incomplete records

CCAB case study for small practitioners - Inadvertent involvement with money laundering

• Anti-Money Laundering (AML) Supervision Report (Period ending 31 March 2021)

Defence Against Money Laundering guidance for Insolvency Practitioners

• Anti-Money Laundering (AML) Monitoring Annual Report 2019

The UKFIU has issued guidance to help signpost firms to various online SAR reporting guidance.

This HM Treasury Advisory Notice contains information on the risks posed by jurisdictions with unsatisfactory money laundering and terrorist financing controls. The Money Laundering and Terrorist Financing (Amendment) (High Risk Countries) Regulations 2021 came into force on 26 March 2021 and will amend the definition of a high risk third country to those identified in a new Schedule 3ZA. This list replicates those countries listed by the Financial Action Task Force as high risk, or under increased monitoring.

The Accountancy AML Supervisors’ Group (AASG) has published guidance in respect of areas in the accountancy sector where there may be a higher risk of money laundering and/or terrorist financing. The guidance sets out the key risks and red-flag indicators to look out for based on emerging threats and trends. The guidance is for auditors, insolvency practitioners, external accountants and tax advisers, as well as firms providing trust or company services.

HMRC have added an updated version of the Supervised Business Register to their guidance on how to check whether a business is registered with HMRC for supervision under the Money Laundering Regulations. Each entry contains the details supplied by the business when they registered with HMRC. Only businesses registered for supervision by HMRC will appear. ICAS firms should be supervised by ICAS, not HMRC, and should therefore not appear on the list. Please inform regulatoryauthorisations@icas.com if your firm appears in error.

SI 2020/991 amends SI 2017/692 to transpose amendments to EU directive 2015/849/EU and to ensure effective operation post IP completion day. The new regulations amend the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (SI 2017/692). The provisions cover a change in ID requirements, discrepancies in registers, enhanced due diligence, beneficial ownership information and EU exit amendments.

Draft guidance has been released by CCAB, pending approval from HMRC, based on the law and regulations as of 10 January 2020. The guidance covers the prevention of money laundering and the countering of terrorist financing. It is intended to be read by anyone who provides audit, accountancy, tax advisory, insolvency or trust and company services in the UK and has been approved and adopted by the UK accountancy AML supervisory bodies.

In view of the current circumstances and COVID-19 there may be circumstances in which a client requires urgent advice in a time frame that does not allow completion of client due diligence (CDD) in sufficient time. Regulation 30(3) permits CDD to be completed whilst establishing the business relationship provided that the verification is competed as soon as practicable after contact is first established. Although there is existing guidance this document, published by CCAB, aims to provide further detail on the principles that underlie the guidance and how it can be applied in the current circumstances.

The UK Financial Intelligence Unit (UKFIU) has published new SAR Glossary Codes and Reporting Routes. There are three new SAR Glossary Codes which have been introduced as a result of the increased threat posed by organised crime groups (OCGs) seeking to exploit the Covid-19 situation by means of fraud. The May 2020 version of the glossary codes provides additional clarification of when, and how, these Covid-19 codes should be used. The revised booklet replaces all previous publications.

New requirements brought in by The Money Laundering and Terrorist Financing (Amendment) Regulations 2019, effective from 10 January 2020, include a requirement to check details recorded on the Persons with Significant Control Register and report any discrepancies with the information obtained a result of activities carried out under the AML legislation. Further information on the requirements, including when and how to report, is included within this article.

Legislation to implement the EU 5th Anti Money Laundering Directive has today been laid in Parliament. The Statutory Instrument amends The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 and will become effective on 10 January 2020. While firms will be required to be compliant with the new requirements from 10 January 2020, in our capacity as an AML Supervisory Body ICAS will take into account the short lead-in time which firms have been given to implement all the new requirements in assessing the response to non-compliance identified. Each case will be assessed on its own merits.

HM Treasury have issued updated advice about risks posed by unsatisfactory money laundering and terrorist financing controls in overseas countries.

The Insolvency appendix for the CCAB Anti-Money Laundering Guidance for the Accountancy Sector has now been published on the CCAB website and can be found using the following link. The appendix is in draft and has been submitted to HM Treasury for approval.

Following the approval from HM Treasury, the tax appendix for the CCAB Anti-Money Laundering Guidance for the Accountancy Sector has now been published on the CCAB website and can be found using the following link.

• Anti-Money Laundering (AML) Monitoring Annual Report 2018

ICAS, as an AML Supervisor, needs to keep firms informed of money laundering risks.  This report, produced by The Financial Actions Task Force is useful reading for firms to help identify the most prevalent global money laundering risks by professional money launderers.

ICAS is required to operate an approval process to approve all principals, owners and management in the firms we supervise from an anti-money laundering (AML) perspective.

After 25 June 2018, no person may be the beneficial owner, officer or manager of a firm/sole practice, unless that person has been approved by the supervisory authority of the firm. It will be a criminal offence to act without approval. MLRO’s can access and complete the application form here.

News alert: NCA publishes first edition of the Defence Against Money Laundering Frequently Asked Questions (DAML FAQ v1)

DAML FAQ v1 draws together the good practice and interpretations provided by experienced Money Laundering Reporting Officers (MLROs) from across the UK SARs regime. Collaborative answers are provided to the most frequently asked questions concerning the DAML process.

ICAS issues Anti-Money Laundering Annual Report PDF [1,449 KB]

ICAS issue Anti-Money Laundering Regulations

The draft CCAB AML Guidance has now been approved and should be used by all firms.

The new Money Laundering Regulations 2017 require all firms to conduct a firm-wide AML risk assessment. ICAS will be asking all supervised firms to submit their first risk assessment soon, as part of the next phase in the AML approval process.

ICAS has produced guidance on how to conduct these reviews, along with a template checklist and worked-case studies, with the view to supporting practitioners in conducting their first risk assessment. These forms are not mandatory and firms are allowed to develop their own template or use a proprietary checklist if preferred.

Firms should, however, ensure that their risk assessment covers the key risk criteria in the regulations.:

1. Clients: consideration of the nature of the clients the firm acts for.
2. Geography: where the clients operate.
3. Services: the nature of the services that the firm provide the clients.
4. Transactions: the nature of transactions.
5. Delivery Channels: the firm’s means of delivering services.

An email with more information will be issued to all MLROs/MLCPs in March 2018, along with an article in the CA Practice Magazine.

The European Union Financial Sanctions (Amendment of Information Provisions) Regulations 2017 came into force on 8 August 2017 requiring that all relevant businesses report knowledge of a designated person or offences committed under the legislation to the Office of Financial Sanctions Implementation (OFSI).

Relevant businesses include auditors, external accountants, tax advisers and trust and company service providers. General Guidance is available here and the reporting form is available here.

We have raised with OFSI the fact that such relevant businesses would also have an obligation to report under the Anti-Money Laundering regime via a Suspicious Activity Report (SAR) and queried whether double reporting would be required. OFSI has now clarified that reports should be made to both the NCA via a SAR and OFSI.

The draft revised AML forms went live this morning on GPPM.

A14.3a Identification form – Individual

A13.3b Identification form - Company

A14.4a Detailed KYC & Risk assessment/review – Individual

A14.5a Detailed KYC & Risk assessment/review – Entity

These forms are in draft pending approval by HM Treasury of the revised CCAB Guidance on Money Laundering, but can be used with immediate effect.

The FCA have recently issued guidance on the treatment of Politically Exposed Persons (PEPs) for AML purposes.  The guidance can be obtained on the publication section of the FCA website:

• There is useful guidance on who should be treated as PEPs.
• The requirements of the Money Laundering Regulations 2017 are highlighted, especially the requirement that each PEP must be risk-assessed on case-by-case basis.
• UK PEPs (family members and associates) should be treated as low risk, unless there are other risk factors not linked to their position as a PEP meaning they pose a higher risk.
• The Financial Ombudsman Service will consider complaints from PEPs, their family members or close associates – and will take the guidance into account.

New AML Accountancy Sector guidance has been published to provide practical guidance on the implementation of the new AML Regulations. This guidance replaces the previous CCAB Guidance issued in 2008. It is in draft form as requires HM Treasury Approval.

All MLROs and AML Compliance Principals should read this guidance, and share it with relevant principals and staff, as required. Our future AML monitoring is likely to focus on compliance with both the requirements of the new regulations and this associated guidance.

The guidance can be accessed on the CCAB website.

It is understood that further guidance will be issued in due course in relation to some specialist areas, including insolvency (IPs will be contacted separately once insolvency guidance is issued).

The Government published the new regulations on Friday 23 June 2017, which came into force with effect from Monday 26 June 2017. They bring in very significant changes to the UK’s Anti-Money Laundering (AML) regime and will have wide-reaching changes for our firms. For further details please see below.

New Money Laundering Regulations 2017 (Published 26 June 2017)

• Letter issued to all ICAS AML supervised firms
• Document issued to all ICAS AML supervised firms: “The Money Laundering Regulations 2017: What you need to know”
• Summary of main changes between the draft and final regulations: this is to provide members who recently attended our Practice Management course (and received an AML update on the draft regulations) with a brief update on the main changes between the draft and final regulations.

The UK Government published the draft 2017 Money Laundering Regulations in March this year and, in spite of the General Election on 8 June, these will still come into force on 26 June 2017 ( subject to any final amendments).

At the same time, the UK Government also published its response to the 2016 consultation on the AML Supervisory Regime. In short, the outcome of that is the proposed creation of a new oversight body for the accountancy and legal professions – The Office for Professional Body AML Supervision or OPBAS. The regulations to establish this body have still to be set out but it is expected that it will be operational by 1 January 2018.

There are very many issues arising for the creation of OPBAS affecting both ICAS, as a supervisor, and consequently our supervised firms. We have already held an informal meeting with the team at the Financial Conduct Authority charged with setting up the body. We will in the coming weeks be reaching out to our firms to discuss with them the impact of the new regime may have. This will involve working groups and wider publicist of the administrative changes. Please keep visiting this page for the latest information.

Meanwhile here are some of the main changes in the new 2017 Money Laundering Regulations:

1. Politically exposed persons (PEPs): the definition has been widened to include domestic PEPs and their family members and known close associates and clarification given that a PEP must be a prominent public figure in a senior role;
2. Beneficial owners (BOs); the definition of a BO remains at 25% share capital or control of an entity; however, BOs now have to have their identity verified; it is noted that simple reliance on the new persons of significant control register held by a company may not be enough;
3. The registration limit for high value dealers is reduced to €10,000 from €15,000.
4. Firms are now required to carry out an overall firm wide risk assessment and, on request, submit this to its supervisor;
5. All policies and procedures must be approved in writing by a senior management person;
6. There is a new requirement for an independent audit of the compliance with the policies and procedures. At this time it is unclear what the term ‘independent audit’ means in this context and we are urgently seeking clarification;
7. Sole practitioners with no staff or sub-contractors are excluded from the requirements at 5 and 6 above.

These and other matters, as well as the implications of OPBAS, will be fully covered in the 2017 series of practice management courses.

• All change for AML PDF [150 KB]

• ICAS 16.78.17 Response to the Government’s Consultation on the Anti-money laundering supervisory review PDF [76 KB]
• ICAS Response to OPBAS Sourcebook Consultation PDF [374 KB]
• ICAS response to (OPBAS): FEES PROPOSALS PDF [373 KB]