can tailor content to yourself and give you the best possible experience.
FA Simms & Partners to provide a dedicated helpline to AOA members supplying business rescue and insolvency guidance. This help line is completely free and so is the advice you receive. The guidance covers all aspects regarding personal and corporate procedures and will be delivered by a fully Licensed Insolvency Practitioner.
FA Simms & Partners have many years' experience in providing these helplines and they have proven extremely valuable to both businesses and individuals who need support in these areas.
FA Simms & Partners, as a business rescue and insolvency firm, have been helping companies with insolvency and business worries for 35 years and have worked with AIA for the past eight years.
If you’re an AIA member then you have access tothe Anti-Money Laundering Compliance Company (AMLCC) for free. This package usually costs £197 plus VAT per annum, so this is a significant saving. The free access for your firm includes the MLRO (Money Laundering Reporting Officer) and three staff.
The regulations setting out the anti-money laundering (AML) compliance requirements for accountants and bookkeepers were updated last summer.
We’re encouraging firms to look beyond pure compliance and see the actual risks that exist for the firm and their clients.
What is AMLCC?
AMLCC is an online package of tools that work in unison to deliver AML risk management and compliance.
AMLCC brings order and logic to the process of guiding you through the recording of the steps that are, I’m sorry to say, not optional.
Tailoring the AMLCC package to how your firm works is of equal importance as all firms will work in their own way. Adding comments to the answers to questions and personalising the AML policy for your firm’s approach are examples of making AMLCC yours.
All aspects of your firm’s compliance can be easily updated as part of your firm’s ongoing commitment to keeping its AML measures up to date.
Risk Based Approach - Allocate Resources Where They Are Needed Most
The flexibility of AMLCC facilitates the implementation of a risk-based approach toAML and countering the financing of terrorism (CFT) allowing firms to allocate their resources to the higher risk areas. The implementation of a firm risk-based approach to AML/CFT is a mandatory requirement of MLR 2017.
Firm AML Policy
The firm policy is drafted to be purposely wide in its scope and to contain an educational content. If you work with a team, staff members must read and acknowledge their understanding of the policy within AMLCC.
The draft policy is available in a text editable format through the online AMLCC system. Any changes your firm makes to bring the policy in line with your firm’s approach and operating structure will be saved with a date and time and can be edited at any time in the future.
The firm services list is another important part of tailoring the AMLCC system to your specific firm. The MLRO can update the list at any time and a revised report of the services is saved and stored.
Where appropriate, guidance and links have been included for individual firm services. The firm services are cross-referenced to those your firm lists as being provided to any particular client.
Firm Risk Assessment
The AML regulations require every firm to perform a firm risk assessment alongside the client risk assessment that it is already undertaking.
The AMLCC online firm risk assessment will take your firm through a series of questions that will document the risks that your firm may be subject to. Guidance and mitigation steps are an additional benefit.
The new risk mitigation function in AMLCC discussed below will provide a simple way for your firm to show that it has understood and mitigated against the money laundering and terrorist risks to your firm by assessing customers, countries of operation, products and services and delivery channels for those products and services.
The new function of creating and saving risk assessments for similar clients which can then be amended allows for a quicker method of completing and reviewing client risk assessments.
Client Risk Assessment
A client risk assessment for every client of your firm is required. A series of questions for different client types will guide you through the key risk areas.
You now have the ability to add comments, read guidance and mitigation and follow links to useful documents and sources.
The MLR 2017 are more detailed. Therefore, more areas are covered in greater detail within the client risk assessment.
We’ve worked to simplify the client risk assessment process by introducing some “dependent” questions that will be either pre-populated or marked as “not applicable” depending on the answer to an earlier question.
Risk Mitigated Function
This is to give firms more control over the risk profile of their clients and to be able to demonstrate that they have taken positive steps to understand and mitigate the risks identified for a client.
When a user is completing a client risk assessment process they can flag a high-risk answer to a question as one they believe that the risk has been mitigated for. The MLRO for the firm (or addressed directly if the risk assessment is being performed by the MLRO) can then accept or reject that the risk has been mitigated.
If all the high-risk answers to a client risk assessment have been successfully mitigated, then the client will move out of the high-risk category and into the risk mitigated category.
This feature will be available in the near future.
Saved Template Answers Function
Where a firm has any number of clients with similar profiles the firm can save a set of template answers for a client risk assessment. Each saved template would be assigned to a particular client type, e.g. personal or corporate client.
A user can then select a set of saved template answers when creating a new client or updating an existing client risk assessment.
The selection of a set of template answers will fill the answers to the client risk assessment. A template will include any comments on answers as well. The template answers can then be edited to match the precise risk profile of that particular client.
This feature will be available in the near future.
If it’s not written down it didn’t happen. Your records are your firm’s defence to criticism.
Keep a record of your key AML documents on AMLCC. Keep a history of updates and amendments along with an audit trail of key changes. Upload important documents including copy ID documents.
The AMLCC professionals guide is available online via the AMLCC platform.
Suspicious Activity Reports (SAR)
Regulated firms are legally obliged to make SARs to the National Crime Agency (NCA). Failure to do so could have legal, regulatory and disciplinary consequences.
Reports can be made between staff and the firm’s MLRO within the system. Reports to the NCA will need to be reported directly to them.
Continuing Professional Development (CPD)
The training of both staff and senior management is a responsibility of the firm. Any lack of training could leave the firm exposed to legal, regulatory and disciplinary action if the regulations and sector guidance is not followed.
Two levels of online training videos are both accompanied with a deck of slides. The online tests allow users to demonstrate an understanding of AML. A log is kept within AMLCC of the videos being watched by users and a certification confirming successful completion of the test of also produced.
The detailed policy template provides additional educational content as do the guidance, links and mitigation steps available across the risk assessments and firm services tools.
Customer Due Diligence
It is crucial to identify and verify all of your firm’s clients and their beneficial owners by obtaining copies of ID, conducting online identity verification checks and ideally meeting the client face to face. Access to Equifax online verification checks is available via AMLCC.
Enhanced Due Diligence (EDD)
There are circumstances that the regulations explain require EDD. Enhanced meaning a higher level of due diligence. AMLCC guides you through when to apply EDD and what measures to apply as EDD.
There is much doom and gloom about the UK economy right now with the coronavirus pandemic set to cause the deepest recession in Britain for 300 years. Many companies, large and small, face the prospect of administration. But rather than fear it, could it be a blessing in disguise?
The Azzurri Group has recently been sold out of administration, saving around 5,000 jobs.
Steve Holmes, chief executive of Azzurri Group, said: “Despite being a successful operator, the immediate loss of revenue during lockdown meant that we have had to make some incredibly difficult decisions to protect the business for the long term.
“Additional investment has enabled us to preserve the majority of our restaurants, stores and jobs and I am confident that, under TowerBrook’s ownership, Azzurri will navigate the period ahead successfully.”
How could administration benefit the company?
The‘breathing space’ administration affords is one of the main benefits, but it is far from the only one.
Move forward debt free
Negotiating deals to pay off creditors means you can move your business forward debt-free. This increases your scope for investment in technology, staff, product development and marketing/PR. It could also give you a competitive advantage over rival businesses carrying a debt burden.
Create a more agile business
Too often companies operate a business model‘because we’ve always done it that way’. Streamlining is an inevitable part of the administration process, giving you the opportunity to work better with customers, suppliers and staff.
For example, the coronavirus pandemic has shown many firms that they can operate without having to rent office space (or they can vastly reduce their office-space requirements).
Mike Hampson, chief executive of Bishopsgate Financial, told the ‘thisismoney’ website the company is“ditching [its] swanky offices in London”. The business employs 18 people but following the lockdown he has realised that the staff only needs to meet a couple of times a month to operate, and all will be working remotely.
Save jobs – and the wider economy
Unlike insolvency, where all jobs are lost, administration means there’s a good chance some jobs will be saved.
And by continuing to trade, your company is helping others by doing business with them – and so the wider economy. The government benefits too, from an increased tax take and spending less on social security programmes.
Enhance your business reputation
Taking a company into administration and bringing it out the other side leaner and more fit-for-purpose shows you have solid business acumen and are not afraid to make tough decisions when they need to be made.
Types of Administration
Administrations generally resolve in four ways: with a CVA, with a pre-packaged insolvency sale, with a healthy, stable business, or with liquidation/dissolution.
For the purposes of this article we will focus on the first two.
Company Voluntary Arrangements (CVA)
CVAsare a common way of dealing with potential insolvency. Working with a licensed insolvency practitioner (IP), you must work out a schedule for repaying your debt – also outlining what percentage of the debt you will be paying back.
A CVA is a formal arrangement that must be overseen at all stages by the IP, who ensures creditors are paid the right amount and on time.
Creditors vote to accept the proposal, and in many cases approve because they accept that having some of their debt repaid is better that none at all (which could be the case with liquidation).
The process has also been used by clothing store All Saints, Hotter Shoes and high street giant Debenhams.
Insolvency trade body R3 describes a pre-pack as: "Where the sale of a company’s business and/or assets is arranged before the start of an insolvency procedure then completed immediately or shortly after the procedure begins. Proceeds from the sale are used to repay the company’s creditors.”
Pre-packs take place when an IP agrees a pre-pack is the means of achieving the best possible returns for the company’s creditors (all pre-packs are overseen by an IP).
Bed retailer Dreams and Blacks Leisure are examples of where a pre-pack has been used successfully.
The Corporate Insolvency and Governance Bill
The focus of theCorporate Insolvency and Governance Act 2020, which came into force on 26th June 2020, introduces a formal‘moratorium’ - an initial period of 20 business days - during which no legal action from the majority of creditors can be taken against a company without court permission.
It will allow SMBs extremely valuable time to seek help from an IP - only a licensed insolvency practitioner can supervise a company entering a moratorium - and formulate a rescue plan.
Going into administration can be daunting. But with the right help it need not be the end of the line for your business. You could emerge debt-free (or with much less debt), leaner, with a clearer plan for the future.