This short video should help all eligible firms to comply with AML legislation, by giving pointers and tips on how to use the freely available ICAS General Practice Procedures Manual.
In UK law, money laundering is defined very widely, and includes all forms of handling or possessing criminal property, including possessing the proceeds of one's own crime, and facilitating any handling or possession of criminal property. Criminal property may take any form, including in money or money's worth, securities, tangible property and intangible property.
Money laundering can be carried out in respect of the proceeds of conduct that is an offence in the UK as well as most conduct occurring elsewhere that would have been an offence if it had taken place in the UK.
CCAB - Anti-money laundering guidance
The Guidance issued by the Consultative Committee of Accountancy Bodies has received the approval of HM Treasury. Guidance which is approved by Treasury is 'relevant guidance' within the meaning of the
Money Laundering Regulations 2007. Courts must consider relevant guidance when determining whether an accountant's conduct gives rise to certain offences under either the Proceeds of Crime Act 2002 or the Money Laundering Regulations 2007. It is this guidance which practitioners should consider as authoritative when implementing and complying with anti-money laundering requirements. The Guidance provides the accountancy sector with not only an interpretation of the requirements of the Money Laundering Regulations 2007 (as amended) and primary legislation relating to money laundering and terrorist financing but also practical guidance on good practice for matters not prescribed in law.
Download CCAB AML Guidance
The Joint Money Laundering Steering Group's (JMLSG) latest guidance, in relation to money service businesses, has received ministerial approval.
National Crime Agency publishes 2015 Threat Assessment
The National Crime Agency (NCA) has published its National Strategic Assessment (NSA) for 2015 of the threats posed by serious and organised crime. The NSA provides a fascinating picture of the wide range of criminal activity with which law enforcement has to deal. For ICAS members, especially those in practice and others working in the regulated money laundering sector, it is a very useful insight into money laundering issues generally and specific areas of concern like cyber-crime.
More information and a copy of the NSA is available on the National Crime Agency website.
HM Revenue & Customs have released updated Anti Money Laundering Guidance for Money Service Businesses. The updated guidance, which is produced in accordance with the 2007 Money Laundering Regulations
The UK government has released its latest information on jurisdictions with anti money laundering and Counter financing of terrorism system weaknesses.
Law set to change for "professional enablers"
The Government has outlined plans to strengthen its powers to punish professional advisers such as accountants and lawyers who "turn a blind eye" or use their professional status to facilitate the transfer of criminal property. The new offence of "participation in an organised crime group" which was outlined in the Queen's speech, sees a maximum sentence of 5 years for professionals who are found to be complicit in their clients' wrongdoing.
Beneficial ownership plans set out
The government has set out plans for a central public register detailing company ownership information. The government is intending on requiring that companies hold information on all individuals who own or ultimately control more than 25% of a company's shares or voting rights. Companies will be required to list details on these beneficial owners including full names, date of birth, nationality, address, details of the beneficial ownership and how it is held. The information will be held at Companies House and newly incorporated companies will also have to make an initial statement of beneficial ownership on incorporation.
Hillgrove PR Case
The recent tax fraud case involving Richard Hillgrove, a PR Consultant with several high profile clients, is of significant relevance to accountants. His company, Hillgrove Public Relations Limited, had avoided paying VAT totalling £52,000 and PAYE totalling £43,000. The money was spent on luxury items such as flowers and hotels. Hillgrove also owed taxes from a Limited Liability Partnership, RJH Management, a business he had operated with his wife. One of the main pieces of prosecution evidence on which the case hinged was a suspicious activity report (SAR) submitted by his former accountant. This SAR was picked up by HMRC, who were already investigating Hillgrove. What is unusual about this case is that the contents of the SAR were actually directed to be disclosed in court by the judge, since one of the defences put forward by Hillgrove was that HM Revenue & Customs (HMRC) and his former accountants were involved in some sort of collusion to bring about his downfall. Michelle Bishop, partner at Bishop Fleming, was involved in Hillgrove's affairs from November 2010 to January 2012. She was summoned as a witness and asked in detail about her firm's relationship with Mr Hillgrove and the basis of her SAR. There are two points here:
1. The disclosure of the contents of the SAR and subsequent cross examination of the submitter will prove as something of a warning to accountants to make sure that they get the procedural side of things correct when they find themselves in a situation where they need to report to the National Crime Agency.
2. Hillgrove was a headstrong and potentially morally dubious individual. Accountants who become involved with clients of this type should not forget their ethical duties and also their duties under the Proceeds of Crime Act 2002. It is not yet clear whether Hillgrove will appeal the court ruling but if he does we will of course keep you informed of this and any further ramifications that may impact practitioners.
Ukraine Unrest – risk of corrupt asset flight
The recent political unrest in the Ukraine has raised the risk of corrupt asset flight. Firms and financial institutions are therefore to be reminded of their duties under the Money Laundering Regulations and the Proceeds of Crime Act. Corrupt asset flight may be facilitated through companies and other legal arrangements, or other transactions designed to quickly liquidate assets held in the UK. Robust beneficial ownership checks by firms are therefore vital. Firms who have clients with links to the Ukraine should consider this potential increased risk when performing due diligence, ongoing monitoring and beneficial ownership checks. View the FCA press release.
Consent Requests Guidance Released
The National Crime Agency has released its annual guidance note on consent requests in the Accountancy sector. This publication gives some useful insight into the main issues around consent and what reporters should be aware of when applying for consent.
Sanctions Information Changes Location
The location of UK Financial Sanctions information has now changed and is no longer on HM Treasury's website (it has now moved to .gov.uk). Information on the latest jurisdictions affected by United Nations, European Union and UK sanctions is available on the gov.uk website.
Information on high risk and non-cooperative jurisdictions and equivalence can still be sourced on the website of the Financial Action Task Force.
With the changes in the anti-money laundering regulatory environment in recent times, a number of the requirements have resulted in common queries from accountancy firms, primarily in relation to client identification procedures, client engagement procedures, staff training and reporting requirements.
A number of queries have been published in the ICAS CA Practitioner Service's bi-monthly Technical Bulletin, and are categorised on a separate page. Please login to the website before visiting our AML queries page.