On the straight and narrow

Richard Simms explains how you can achieve compliance and manage risk when it comes to money laundering

You may have read about the updated Money Laundering (ML) Regulations that came into force on 10 January this year. To read more on these updates please take a look at my article on the AMLCC website by searching for “2020 regs” in the ‘News & Articles’ section.


Here’s a refresher on what’s expected of an accountancy/bookkeeping practice for Anti-Money Laundering (AML). Throughout this article I have explained how AMLCC will help you achieve what’s required. Don’t forget those of you with an ICPA practising certificate get access to AMLCC included.

Allocate resources: AML is not optional. Your practice is obliged to allocate time and effort into having robust and effective AML operations in place. Some practices do charge an annual AML fee to clients; if you don’t you will need to absorb these costs within your fee structure.

Educate and train: You must be trained in AML. If you have a team working with you that touch on any aspect of AML then they must also be trained. Training is not just to gain an understanding of AML regulations and guidance. It’s essential there is a clear understanding of how your practice’s AML systems work and what its approach to AML is.
AMLCC provides training videos that provide both essential training and higher level training for senior team members. AMLCC tracks when a video has been watched and records the date and result of the staff/MLRO tests on the system.
Training on the updates to the regulations is being prepared within AMLCC and will be released in the near future.

Allocate resources: AML is not optional. Your practice is obliged to allocate time and effort into having robust and effective AML operations in place. Some practices do charge an annual AML fee to clients; if you don’t you will need to absorb these costs within your fee structure.

Educate and train: You must be trained in AML. If you have a team working with you that touch on any aspect of AML then they must also be trained. Training is not just to gain an understanding of AML regulations and guidance. It’s essential there is a clear understanding of how your practice’s AML systems work and what its approach to AML is.

AMLCC provides training videos that provide both essential training and higher level training for senior team members. AMLCC tracks when a video has been watched and records the date and result of the staff/MLRO tests on the system. Training on the updates to the regulations is being prepared within AMLCC and will be released in the near future.

Outsourcing to third parties: Do you outsource any of your practice’s work to third parties? The new regs introduce the term ‘agents’, who are those outside of the practice that undertake work on behalf of the practice. Agents must be trained in the same way as the practice’s staff. This would include any outsourced accounting or bookkeeping work.

Write it down: If it’s not written down it didn’t happen. This applies to all aspects of AML. Your records are your defence. That means records of all the areas that are covered by this article. Your AML records are waiting online for you to tailor to your practice on AMLCC.

Evaluate risk: What risks do you face as a practice, and what impact do the practice’s clients have on that risk? The AML regulations are, by being more detailed, progressively becoming clearer on many of the risks that need to be considered. A practice will make many decisions that will affect its risk of exposure to money laundering. For example, how does it engage with clients; what business sectors does it target?

Money laundering is dynamic, and so must your practice’s AML be. Any representation of risk formed by way of a risk assessment is potentially only of value at the point it is created. As your practice changes and your clients change so does your exposure to risk.

Simple things like a new client or a new team member present risks; they can be mitigated through training and due diligence.

Your practice must have a documented risk assessment for itself and for each of its clients. AMLCC provides online risk assessments for your practice and for each different entity type of your clients. Each risk assessment includes guidance and mitigation steps along with space for comments and the options to upload documents. An audit trail of risk assessment changes is kept along with copies each time a risk assessment is updated.

An additional option is to demonstrate risk mitigation and drop the risk level of a risk assessment question with approval from the practice’s senior management.

Verify your clients: Confirming the identity of your clients is essential. Changes in the new regs reaffirm that keeping that information up to date is equally important. Watch out, though, when using online verifications as sometimes these systems are not able to verify that the client is who they claim to be and, if that is the case, you’ll still need to obtain and keep copies of hard copy documents.

AMLCC has a document management facility to allow verification documents to be uploaded and has PAYG access to online verifications from Equifax.

Operational and organisational: An evaluation of risk means that your practice must consider, in the light of its own unique exposure risk, its approach to AML. It’s essential to document the practice’s AML policy.  The policy must be shared with any team members and agents as part of their training.

AMLCC provides a template policy and will pre-fill the practice’s details. The policy is text editable and can be saved to provide a history of changes. All team members and agents much acknowledge having read and understood the policy within AMLCC.

Law enforcement need to know: Your reporting duties to the National Crime Agency are set out in the Proceeds of Crime Act 2002 (POCA). Team members should report to the person responsible for the practice’s reporting duties (the Nominated Officer) and then consideration should be given to an onward report to the NCA.  AMLCC allows internal reports to be made.

Look out for a visit: Be ready to provide evidence to your AML supervisor that your AML operations are complete and up to date. Equally a client specific enquiry could come from law enforcement agencies such as the police, HMRC and trading standards.

Using the AMLCC supervisors access function will allow to you to demonstrate your AML operations with a dedicated login for your firm’s supervisor. Counter terrorist financing: Though the goals of money laundering and terrorists differ the methods used often overlap. The Terrorism Act 2000 (TA 2000) has very similar reporting obligations to POCA. AMLCC draws attention to the obligations under TA 2000.

• Richard Simms is Managing Director of AMLCC. See www.amlcc.co.uk/web

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