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Safeguard your business with AIA anti-money laundering supervision
Accountants are key gatekeepers for the financial system, facilitating vital transactions that underpin the economy. As such, they have a significant role to play in ensuring their services are not used to further a criminal purpose.
The Regulations aim to ensure that relevant individuals and firms have the most appropriate and proportionate measures to deter, detect and disrupt money laundering and the financing of terrorism.
The Regulations apply to all practising accountants, persons and firms providing ‘accountancy services’. Those offering accountancy services who are not supervised by an approved body will be breaking the law.
What is money laundering?
Money laundering is defined very widely in UK law. It includes all forms of using or possessing criminal property (as well as facilitating the use or possession) regardless of how it was obtained. Criminal property may take any form, including: money or money's worth; securities; a reduction in a liability, and tangible or intangible property.
Money laundering can involve the proceeds of offending in the UK but also of conduct overseas that would have been an offence had it taken place in the UK. There is no need for the proceeds to pass through the UK.
Money laundering activity can include: a single act (for example, possessing the proceed's of one's own crime); complex and sophisticated schemes involving multiple parties; multiple methods of handling and transferring criminal property; or concealing criminal property or entering into arrangements to assist others to conceal criminal property.
MLR2017 requires all firms that provide accountancy services, trust or company services, or related services such as tax advice, audit or insolvency, to be supervised for compliance by a professional body listed in schedule 1 of MLR2017.
AIA automatically supervises members holding a Practising Certificate unless they are supervised by another professional body under MLR2017. Members that provide trust or company services as part of their main accountancy practice will be supervised by AIA for all their work.
If a member has a group structure and has subsidiaries which are authorised firms under the Financial Services and Markets Act for FCA-authorised activities, AIA will supervise the non-FCA regulated work.
If you or your firm are operating in one of the business sectors within the scope of MLR2017 and you are not already supervised by a professional body or the FCA then you must register for supervision. HMRC has further guidance on theirwebsite.
Make a membership and practising certificate application using the link below.
Guidance is essential for all entities providing audit, accountancy, tax, insolvency or related services in the United Kingdom (including firms providing trust or company services) by way of business, irrespective of membership of a recognised professional body and sets out how to fulfil AML regulatory requirements.
AIA offers extensive guidance and support for supervised firms including:
firm-wide risk assessment
policies, controls and procedures
criminal record checks
client due diligence
simplified and enhanced due diligence
politically exposed persons
reliance on third parties
record keeping and data protection
Trust and Company Service Provision
In addition AIA provides:
guidance on the legal requirements and best practice for submitting Suspicious Activity Reports (SARs)
Accountancy firms supervised by AIA under the Money Laundering Regulations must have robust policies and procedures in place, appropriate to the individual firm's needs, to ensure anti-money laundering compliance and AIA is pleased to offer access to AMLCC free of charge to AIA Members in Practice.
AMLCC subscription provides firms with the essential tools needed to assess their clients through online reporting and record keeping as well as train their staff, this in turn gives reassurance to the AIA that AIA registered firms are meeting their statutory obligations and incorporating best practice into their work.
The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR2017) requires all businesses acting as trust or company service providers (TCSPs) in the UK to be registered with HMRC where they are not already registered with the Financial Conduct Authority (FCA).
Firms that are not registered are not permitted under the MLR2017 to provide TCSP work.
Under MLR2017 a trust or company service provider is any firm or sole practitioner whose business is to:
form companies or other legal persons
provide a registered office, business address, correspondence address, administrative address for a company, partnership, other legal person or arrangement
act or arrange for another person to act as a:
director or secretary of a company
partner (or in a similar position) for other legal persons
trustee of an express trust or similar legal arrangement
nominee shareholder for another person, unless the other person is a company listed on a regulated market which is subject to acceptable disclosure requirements
A person is still considered to be a TCSP provider even if these services are provided incidentally to other accountancy services, or they are provided infrequently or on a one-off basis.
HMRC's TCSP registrationguidanceprovides further information on what constitutes a TCSP.
HMRC'S TCSP REGISTER
In order to maintain the TCSP register, HMRC has requested that AIA (along with the other professional body supervisors) to notify HMRC of all the firms that we supervise that perform TCSP work.
AIA adds relevant firm details to HMRC's TCSP register based on your firm return information. The details on the register include:
the name of your firm or your name if you are a sole practitioner
the registered address of your firm
confirmation by the AIA that the beneficial owners, officers and managers are fit and proper.
Approving Beneficial Owners, Officers and Managers
AIA must check that supervised firms comply with Regulation 26 and that all beneficial owners, officers and managers (BOOMs) do not have a relevant criminal conviction.
AIA is only able to approve a BOOM if a valid DBS certificate has been reviewed.
Every newly appointed BOOM must obtain a DBS certificate at the time they become a BOOM and AIA must receive a notification of any appointment along with a copy of the valid DBS certificate. An individual cannot act as a BOOM within the practice without AIA authorisation.
AIA operates a risk-based approach to AML supervision.
The frequency with which practices are reviewed is determined by a Risk Assessment prepared using annual return information, complaints or intelligence from law enforcement or open sources and a variety of other inputs.
TYPES OF MONITORING AND SUPERVISION
The type of review, whether Onsite or Desktop is determined by the AML risk within the practice, calculated by the likelihood and impact of money laundering activity.
AML monitoring is also undertaken during Quality Assurance monitoring.
Prior to any review AIA members submit a response to an advance information request, which is reviewed by the AIA Compliance Team before a subsequent Desktop Monitoring Review (conducted by telephone) or Onsite Monitoring Review Visit.
AIA monitoring ensures that practices have understood and implemented key aspects of the Regulations. During the review the practice's documentation and client files are also reviewed to ensure consistency of best practice.
MONITORING AND SUPERVISION TEAM
AIA's Quality Assurance Advisers and AML Reviewers are experienced individuals who receive regular training, including up-to-date information on the domestic and international risks of money laundering and terrorist financing which affect the accountancy sector.
INVESTIGATION AND ENFORCEMENT
In any instance where AIA monitoring identifies non-compliant behaviour a referral may be made to the AIA Practice Compliance Committee (PCC).
TheGuide to Sanctions provides a flexible and comprehensive framework to deal with non-compliance with the Regulations. There are no limits on the fines that the Committee can impose.
Outcomes from the PCC and Disciplinary Process may include:
Exclusion from membership
Removal of practising certificate
Conditions (e.g. enforcement visit or additional training)
If you come across an accountancy service provider (ASP) or trust and company service provider (TCSP) that does not appear to be regulated under the Money Laundering Regulations 2017 or appears to be ignoring the regulations, and you want to report it confidentially, you can do one of the following:
contact their anti-money laundering supervisor
if their supervisor is AIA, you can report this to us confidentially firstname.lastname@example.org by calling 0191 493 0269
OPBAS is a regulator set up by the government to strengthen the UK’s AML supervisory regime and ensure the professional body AML supervisors provide consistently high standards of AML supervision.
AIA also works in the public interest as part of the Accountancy AML Supervisors' Group (AASG) working closely with HM Treasury, the Home Office and the National Crime Agency to represent members' views and to communicate up-to-date information and guidance back to you.
The AASG is a sub committee of the UK Anti-Money Laundering Supervisors Forum (AMLSF), a forum in which professional bodies work collaboratively to develop supervisory policy to promote consistency in standards and best practice and receive AML intelligence from law enforcement agencies and the government.
AIA works in collaboration with law enforcement agencies, regulators and other professional body supervisors to share intelligence and actively combat money laundering and terrorist financing through the Accountancy SectorIntelligence Sharing Expert Group (ISEWG).