What is required to ensure your practice complies with its Anti-Money Laundering obligations?
ICB supervised members must comply with the requirements of the:
The MLRs and POCA, along with their respective amendments, establish the legal framework for identifying, reporting, and preventing Money Laundering, Terrorist Financing and Proliferation Financing. The regulations impose obligations on financial institutions and other regulated entities, such as external bookkeepers, to have systems in place to detect and report suspicious activities.
Money Laundering can be defined as the process of concealing the origins of illegally obtained money, typically by means of transfers involving foreign banks or legitimate businesses.
Terrorist Financing can be defined as the act of providing financial support, funding, or resources to those who engage in terrorism and its activities.
Proliferation Financing can be defined as the provision of funds or financial services used in the production or acquisition of weapons of mass destruction and their delivery systems, as addressed in the 2022 amendments to the MLRs.
AML Guidance for the Accountancy Sector
The primary AML Guidance for the accountancy sector as a whole is the CCAB Anti-Money Laundering, Counter-Terrorist and Counter-Proliferation Financing Guidance for the Accountancy Sector 2023. You should download this document to inform your practice AML activity.
This guidance is based on the law and regulations as of 13 July 2021. It replaces the draft guidance published in September 2020 when it was updated to reflect amendments made to the MLRs earlier that year in response to the Fifth Money Laundering Directive (5MLD) from the EU.
> CCAB Anti-Money Laundering, Counter-Terrorist and Counter-Proliferation Financing Guidance
AML Guidance specifically for ICB-supervised bookkeeping and payroll practices
In addition to the CCAB Guidance, we provide guidance tailored to ICB-supervised practices.
Prior to awarding you a licence we will invite you to a virtual meeting with one of our AML Officers so that we can approve you and any of your Beneficial Owners, Officers or Managers (BOOMs). We will use this opportunity to discuss your practice set-up and AML obligations and you will have the chance to ask any questions you have about the requirements of the MLRs.
We host a New Practice Welcome Webinar each month to provide further guidance for practices. If you are an ICB-supervised practice you are welcome to attend these at any time no matter when you started your practice.
What is required of an AML supervised practice
To prevent money laundering and comply with the MLRs you must:
- carry out a whole of practice risk assessment to understand the money laundering, terrorist financing and proliferation financing risks your practice faces
- establish, maintain and regularly review policies, controls and procedures to mitigate and manage effectively the risks identified through your whole of practice risk assessment
- appoint a nominated officer (MLRO) to be responsible for monitoring any suspicious activity in the practice that might be linked to money laundering or terrorist financing, and if necessary reporting it by submitting a Suspicious Activity Report (SAR) to the National Crime Agency (NCA)
- screen and train relevant staff so that they can properly identify AML risks, red flag indicators and suspicious activities
- carry out customer due diligence and ongoing monitoring of your clients, which includes a risk assessment of the money laundering risks of the client and verify the client’s identity and source of funds (where appropriate). The amount and type of verification procedures should reflect the risk rating of each client
- establish appropriate record keeping procedures by retaining copies of documents, CDD and other records for five years after the business relationship has ceased or the transaction is completed.
- report material discrepancies to the Persons with Significant Control (PSC) Register, Trust Registration Service (TRS) or Register of Overseas Entities (ROE) if it can reasonably be considered to be linked to one or more of the following: money laundering, terrorist financing, concealing details of the business of the customer.
- notify ICB if you are a Trust and Company Service Provider (TCSP) so that you can be added to HMRC's TCSP Register. You must not provide these services unless you are on the register.
- apply to ICB for approval of your Beneficial Owners, Officers and Managers (BOOMs). All BOOMs within a practice must provide documentary proof, usually in the form of a Basic Disclosure Certificate, that they do not have convictions or unspent convictions for an offence specified in Schedule 3 of the MLRs.
Updates:
This guidance may from time to time be updated by ICB. Licence holders will be informed of any material changes but it is your responsibility to ensure that you read and fully understand any new information and incorporate it into your working practices.
For additional guidance on any MLR/AML related matter, the ICB Compliance Helpline number is 0203 405 4000.
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