AIA SUBMITS EVIDENCE TO TREASURY SELECT COMMITTEE ECONOMIC CRIME INQUIRY

The Association of International Accountants (AIA) has presented evidence to the United Kingdom Treasury Select Committee’s 2020 inquiry into anti money laundering controls and systems in the United Kingdom.

The Treasury Select Committee launched a new inquiry in October 2020 to review what progress has been made in combatting economic crime. This inquiry has two strands:

• Anti-money laundering systems and the sanctions regime, including the FinCEN papers and the work of the Office for Professional Body Anti-Money Laundering Supervision (OPBAS)
• Consumers, including emerging trends as a result of coronavirus and Authorised Push Payment Fraud.

Commenting on the launch of the inquiry, Rt Hon. Mel Stride MP, Chair of the Treasury Committee, said: “The previous Committee made a series of recommendations on the UK’s effort to combat money laundering and what can be done to prevent consumers from being victims of economic crime. The current Committee will now examine what progress supervisors, law enforcement and the Government has made in these areas.”

As a professional body supervisor recognised under Schedule 1 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (as amended 2019) AIA recognises its key role in preventing economic crime and contributing to a robust approach to AML safeguards. As part of the submission an overview of the work undertaken as a supervisory body enabling AIA to implement the money laundering regulations and ensure its members remain vigilant to the threat was provided.

Working with other accountancy sector supervisory bodies through the Accountancy AML Supervisors’ Group (AASG) and more widely with government, regulators and other sectors through the AML Supervisors Forum (AMLSF) and additional working and intelligence-sharing groups enables a real public-private partnership which delivers a focussed response to the threat of money laundering and terrorist financing.

As a membership organisation of professionals AIA recognises that the regulations are also in place to protect members and safeguard against their being exploited by criminal elements to facilitate illicit activity. Therefore, AIA works to provide guidance and support, so members learn to recognise the red flags of money laundering and fulfil their obligations by reporting suspicious activity.

In its response AIA outlined several key improvements and observations:

• AIA works constructively with regulators, law enforcement agencies and other professional bodies to undertake its functions as a supervisor under MLR 2017.
• Whilst there are effective mechanisms for combatting economic crime, such as the Intelligence Sharing Expert Working Group (ISEWG) there is more that could be done. As the Economic Crime Plan progresses there is a case for consolidating and reviewing the current number of overlapping working groups and committees to refocus on the reforms.
• Accountants can be assessed to be either complicit or wilfully blind to money laundering risks, or at risk of being exploited by criminals due to negligence or being an unwitting accomplice to money laundering. It is arguable that accountants are more likely to be unwittingly involved in money laundering than undertake illicit activity and professional bodies have an important role in providing support and guidance for members which is not available to non-registered individuals.
• The public interest argument could be strengthened by consolidating and protecting the term ‘accountant’. Introducing this reform will help to strengthen the UK’s fight against economic crime and prevent unqualified and unsupervised individuals evade effective oversight.
• Maintaining up-to-date knowledge and disseminating emerging AML risks is a key activity to help members recognise, respond to and report suspicious activity.
• Following the recent HM Treasury consultation there should be a more structured and transparent plan around allocating money collected for the Economic Crime Levy.

AIA Director of Operations David Potts said, “Whilst there is still progress to be made to fulfil the government’s Economic Crime Plan 2019 – 2022, as a supervisory body AIA has made significant contributions to progress to date, including strengthening internal controls, educating members, enforcing compliance and sharing intelligence.”

Read the full response.

“Whilst there is still progress to be made to fulfil the government’s Economic Crime Plan 2019 – 2022, as a supervisory body AIA has made significant contributions to progress to date, including strengthening internal controls, educating members, enforcing compliance and sharing intelligence.”