Some years ago, in a quite heated meeting of the Accountants Affinity Group, (AAG), I said the group would be ‘sleepwalking into oblivion’ if they did not get their act together and recognise the part that our and their members could potentially be playing in contributing to the money laundering problem if they were not properly trained and supervised.  I went so far as to suggest that we would be silly to think that our members were in some way immune to this growing threat to our very way of life.  I was not popular and there are people from the group who still do not speak to me.  As it turned out, we were sleepwalking straight into OPBAS.  

There was no way, to my mind, that without external governance, the accountancy bodies were ever going to make the right decisions, collectively or individually, that set aside commercial considerations in favour of the greater good. Even today, though, some criticise the need for some government appointed body to look over their shoulders.  Now I must admit that ICB pays considerably less towards the upkeep of OPBAS than many, it is after all based on numbers and fees paid by members.  I also admit that the very first OPBAS audit of ICB AML systems left me indignant, annoyed, and very upset that anyone would have the audacity to question ICB about its intentions and achievements.  But there were shortfalls in what we were doing and our, my, holier-than-thou attitude was always destined to been seen wanting when put under scrutiny.  

ICB has moved forward, taken on board the criticism, and grown from it.  I can now confidently say that we, together with you the membership, have embraced the need to become AML centric.  To better understand the threats and be better armed against being drawn into non-compliance. To do a good job.  To root out bad members.  To be a beacon within the profession.  Okay, I hear you say, this sounds like another Garry Carter soapbox; but I never say anything that I do not believe and I am certainly big enough to admit that ICB did fall short of the mark when first being put under the OPBAS spotlight.  We still cannot realistically get it 100% right all the time, but we are working day and night to ensure we give it our best shot.  I thank each of you as the membership of ICB, for making this a central part of your businesses.  You, together with Team ICB, the ICB Board, the Advisory Council, and above all Steve Hardwick and his team of dedicated intelligence gatherers and inspectors, have given us the support to do this right.  Money laundering is a global scourge, with national threats and local consequences.   This is a team effort and we must all stay alert to the threats.

New and Improved. CCAB guidance; better by definition

Since it was first appointed as a Supervisor, ICB has lined up alongside the Chartered bodies in using their HM Treasury approved AML guidance.  The Chartered bodies, under their collective grouping as the Consultative Committee of Accounting Bodies (CCAB), have always provided their members with guidance on how to interpret the wider Money Laundering Regulations (MLR) and how to use this guidance in the everyday running of their practices. ICB, together with other non-chartered bodies, has adopted this guidance as to the basis for our AML guidance. The CCAB has just released a draft updated version that is currently with HMT awaiting final sign-off.  

Although, as yet, I have only scan-read its 121 pages, the new guidance appears to be a great improvement and I am pleased that some of the new or clarified items are principles that ICB has expected of its members for quite some time.

• The new guidance finally defines accountancy services as ‘any service which involves the recording, review, analysis, calculation or reporting of financial information’.  This is a much broader but clearer definition.

• One thing that I particularly welcome is that the new guidance provides a clearer definition of who exactly should be regarded as a Beneficial Owner, Officer, or Manager (BOOM), which now falls in line with what ICB has been telling members since the outset. Their definition states that a BOOM is anyone who is ‘a sole practitioner, partner or LLP member who holds, directly or indirectly, more than 25% of the capital, profits or voting rights, or exercises control; a shareholder in a limited company, a director, company secretary, a member of the firm’s management board, the MLRO, a member of senior management, any other principal, senior manager or member of a management committee’. Basically, it is anyone who can exercise control over the decision-making processes of a business. 

• They further reiterate Regulation 26 of the AML which requires ‘each beneficial owner, officer or manager in business to be approved by their Supervisory Authority’.  They must ‘ensure that only persons approved to act as BOOMs are appointed’.  

• The new guidance also provides a long-debated definition of what constitutes Tax advice.  Under the new guidance, it would suggest that most ICB members in practice are Tax Advisers, even just by advising what Tax becomes due simply as a consequence of them producing a set of accounts. It removes the perception that Tax advice just covers Tax schemes and more detailed Tax planning.  It states that tax advice ‘now includes the completing and submitting of returns, advising whether something is liable to Tax and advising on the amount of Tax due’. 

• The new guidance reiterates that there is no de minimis threshold for reporting knowledge or suspicions of money laundering.  In other words, there is no lower limit on what needs to be reported.  Money laundering is money laundering and, as ICB has always told its members, there is no subjective decision. 

• There is clarification on the use of electronic data and asks the fundamental question; ‘does the system assure that the person claiming a particular identity is the person with that identity’.  ICB maintains that electronic checks are a worthy additional tool but are not to be used in place of the normal, physical checks. 

The new guidance will shortly be posted on the ICB website and all members will be emailed a link.  Given the newly defined status of Tax Adviser, members should also remember that in addition to the ICB Professional Conduct Relations (PCR) and CCAB AML guidance, they are also governed by the Professional Conduct in Relation to Tax (PCRT).  This is a broad set of rules and should be read in the context of what they can do within their membership of ICB.  These rules do not extend the capabilities of members and do not mean that members can carry out duties beyond their qualification.  

Queen a turn-off for Adder Bookkeeping 

Helen Bower MICB Pm.Dip, Ray Bower CQP. FCQI. I.Eng and their team at Adder Bookkeeping almost got into a right royal pickle recently and were definitely ‘Under Pressure’.  

Renowned for their innovative media campaigns and use of creative marketing, from sending snakes in the post (wooden ones!) to animated videos, their latest ground-breaking initiative included using Freddie Mercury and Queen to provide the background soundtrack.  In correct Adder Bookkeeping tradition, the new video was checked out first with ICB, to ensure they were on song and that their new foray into stardom was in keeping with the ICB ‘One Vision’. 

And that is when the experience of ICB kicked in. 

To earnest requests from Helen of ‘Don’t Stop Me Now’, I immediately asked if they had paid a licence fee for the use of Queen’s music.  At this point, they said they thought their existing PRS licence fee covered it but, having set doubt in their minds, they checked it out.  They got a big surprise.  Their licence did not cover it.  For their next move, they checked with Queen’s management, who said that ‘We Will Rock You’ could be used subject to a £15,000 fee every time!  

It is tough trying to know everything about running a business and it is certainly no ‘Bohemian Rhapsody’ out there.  Which is why we have the ICB community to help. This sort of advice is what we are here for.  ‘These are The Days of Our Lives’ that we are happy to share. Age brings with it a certain level of experience and accumulated knowledge and, purely by chance, June and I both have experience of licensing and have in the past come up against the Performing Rights Society (PRS) and its once near rival but now conjoined body, Public Performance Licensing (PPL).  Now creatively called PPL PRS Limited, in a nutshell, they license the use of songs, films, and performance on behalf of their members who are performers, songwriters, and composers. Traditionally you would have needed a licence from both organisations to copy or use something created by one of their members, the merged organisations now issue a joint licence.  To be honest that is the simplest way of describing one of the most complicated and convoluted raison d’etre that I have ever seen on a website.

Not to be deterred, Adder Bookkeeping decided that ‘The Show Must Go On’ but they have decided not to go with Queen and have opted instead to use royalty-free music.

ICB and its members: ‘It’s a Kind of Magic’.