Stay up to date with the Practice Risk Assessment requirements and changes to AML Online including a Companies House integration
To bring the AML Online platform into line with the Money Laundering Regulations 2017 ICB has revamped the client risk assessment tool. MLR 2017 requires that in depth AML risk assessments are carried as part of a risk-based approach to AML compliance. The new template is designed to ensure that members fully assess the risks that a client could be involved in money laundering activity and accurate completion of the template will help protect you from being used by a client for criminal purposes.
As before the system will generate a risk rating of either High, Medium or Low and you will be required to manage the AML compliance of that client according to this risk score. There is no stigma attached to having a client who the system assesses as being High risk, all this means is that the behind the scenes scoring system inside AML Online has identified activity that indicates there could be a higher risk. Having identified a higher risk, the Money Laundering Regulations then require you to put measures in place to mitigate these risks through enhanced due diligence (EDD), in reality all this means is that you must take extra care with your relationship with the client to ensure there is no money laundering activity.
As at present there is the option to amend the system generated risk rating provided you write your reasoning into the pop-up box that appears, providing adequate evidence for this decision. Amending the system-generated risk rating should only be done in exceptional circumstances; all amendments are flagged up to the ICB AML compliance team who will look into the reasons for the amendment and those amending risk ratings could be prioritised for an AML compliance inspection as we do not recommend you do this. There are certain questions within the template, such as the question regarding whether the client is a PEP, where if your answer highlights there is a high risk, the MLR 2017 requires that EDD is applied to that client business relationship. EDD is a legal requirement in this situation and the system will not allow you to amend the risk rating in these circumstances.
Companies House Integration
To make it easier for you to complete the form accurately, we have introduced a new feature; if you input the regsitration number of a corporate client, AML Online will automatically import the company details from Companies House such as when the company last filed annual accounts and when accounts are next due. It will also import Companies House information on Directors of the company into the CDD section at the bottom of the form.
Taking Member Feedback
We have acted upon members' feedback on AML Online and many of you indicated that the standard risk assessment template wasn’t easy to complete where you were only providing services such as Payroll and Self-Assessment tax returns for a client. You will notice that some minor adjustments have been made to the list of services to make them clearer. There will be a second phase of improvements where we will be introducing new separate templates for members to complete when only providing Payroll and Self-Assessment Tax returns for a client. There will be further communications regarding this.
In future, when starting your AML risk assessment for a client, if you only select the Payroll option under the Services to Client section you will be presented with the new payroll template to complete instead of the standard template. This new template has been designed to take into account the specific money launderings risks associated with payroll services.
Again in future, when you select Self-Assessment Tax option only, you will be presented with the Self-Assessment Tax only option, which again has been designed into account the specific money laundering risks associated with Self-Assessment Tax clients.
If you select any of the other services options as well as the payroll option, you will be presented with both the standard template as well as appropriate questions from the payroll template which must be answered.
Should I reassess all of my clients now?
There is no requirement to go back and re-risk assess all your clients to the new form straight away. Instead, as your clients reach risk assessment renewal time 12 months from the date of the last risk assessment, you will be directed to the new form instead of the old one.
Practice Risk Assessments
We are also bringing in a new template to allow you to comply with Regulation 18 of the MLR 2017 to assess the AML risks that affect your practice. This isn’t something that ICB has been testing during the AML Compliance inspections carried out to date, it was previously thought that the risk assessments carried out on your clients through the AML online process complied with this requirement, however it’s become clear that this isn’t the case so ICB is bringing itself into line with all the other Accountancy Supervisory Bodies.
At the present time you can access the template which is in the Practice Risk Assessment tab of the website. There are instructions on how to use the template and there is a sample template prepared by ICB that you might want to use to see what a risk assessment might look like.
There is a copy of the National Risk Assessment on Money Laundering which was complied by HM Treasury and the Home Office and information put together by ICB on what we perceive to be the current AML risks associated with accountancy services which you might find useful in preparing your own risk assessments.
There is new guidance on the ICB website that outlines the measures you need to take to comply with your AML requirements. You can still contact ICB for further information on AML related matters should you need to do so.
UPDATE: As of March 2020 some members have experienced issues with the AML Online form requiring a registration number for a non-incorporated Partnership. This is a known bug and is being fixed.
