ICB doubles number of AML inspections on practices

In an email issued to ICB practice licence holders, ICB’s Co-Founder and President Garry Carter has warned that the number of AML inspections will more than double in 2019 and licence fees are being increased to cope.

ICB’s strengthened AML regime is responding to the introduction of the Office of Professional Body Supervisors (OPBAS) and the assessment of the UK’s AML system by the Financial Action Task Force (FATF) which has made clear that all UK professional body supervisors must enhance their monitoring of members’ compliance with the requirements of MLR2017 and ensure that ‘contravention of a relevant requirement by a member renders the member liable to effective, proportionate and dissuasive disciplinary measures under the professional body’s rules.’

ICB follows a risk-based approach to anti-money laundering supervision, primarily using AML Online to identify which members are at the greatest risk of being used by criminals to launder proceeds from crime.

Factors ICB considers when undertaking a risk assessment on a member may include the following:

a. Probability: the likelihood of money laundering taking place as a consequence of the activity undertaken by a member (or cluster of members) or the environment they operate in. This risk can increase or decrease depending on other indicators:

  • • product and service risk (the likelihood that products or services on offer can be used for laundering money)
  • • client risk (the likelihood that customers’ funds may have criminal origins)
  • • the nature of transactions (e.g. frequency, volume, counterparties)
  • • geographical risk (does the member, its clients or agents trade in riskier locations)
  • • other indicators of risk are based on a combination of objective factors and experience. These can be drawn from various sources, including: – a supervisor’s wider work with a member– a member’s compliance history, complaints about a member or about the quality of a member’s internal controls – intelligence from other supervisory authorities and law enforcement agencies, and from other sources (e.g. consumers, whistleblowers)

b. Impact: the potential harm caused if money laundering is facilitated by the member, cluster or sector. This can, among others, depend on:

  • • a member’s size (turnover, number and type of customers, number of premises, value of transactions etc.)
  • • links with other businesses (susceptibility to being involved in ‘layering’ activity)

So far this year the ICB compliance team has carried out 16 AML inspections on practices. ICB head of compliance Stephen Hardwick says ‘It’s becoming apparent that a number of members are not complying with our requirement to input any or all of their clients onto AML online and carry out AML Risk Assessments.

‘As part of our new enforcement and penalties policy we are taking a robust stance against those members who fail to input their clients onto AML online and we are putting appropriate sanctions in place to deal with this non-compliance.’

A member of the ICB compliance team will be speaking at each event of the  Inspire Tour (March-May) to provide further guidance on AML including how to use AML Online correctly, how to carry out customer due diligence, how to spot money laundering and how to prepare for an inspection.


Further guidance for practices:

Online MLR resources hub: www.bookkeepers.org.uk/MLR

AML Online compliance tool: www.bookkeepers.org.uk/AML

Inspire Tour events: www.bookkeepers.org.uk/Inspire

AML telephone support: 0203 405 4000 (Mon-Fri 9am-5pm)

AML email support: aml@bookkeepers.org.uk