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Background and representations

"Money laundering" and the "regulated sector" as concepts were extended by the Proceeds of Crime Act 2002 (POCA) The Money Laundering Regulations 2003 (2003 Regulations) to include the proceeds of all crime and suspicions formed on information obtained during the course of carrying on accountancy (and other regulated activities) as a business.

This moved away from the traditional concepts of money laundering. Since POCA and 2003 Regulations there have been further legislative developments.

The key elements of which are:-

ICAEW welcomed the 2007 regulations which were developed through consultation and have been successful in avoiding any additional gold plating of the European requirements.

The 2007 regulations strengthen the enforcement of the anti-money laundering (AML) legislation, by requiring all firms providing accountancy services (as well as related services, such as tax advice, trust or company services, audit or insolvency) to be monitored for compliance by either one of the professional bodies listed in the regulations or HMRC.

Besides supervision requirements the main implications of the regulations were that from 15th December 2007 firms needed to:

  • Have a risk assessment in place, and conduct their client due diligence on the basis of that assessment
  • Conduct more rigorous due diligence for all higher risk clients, including (specifically) public officials from outside the EU (Politically Exposed Persons or PEPs) and in relation to remote client services (where no physical meeting with the client takes place)
  • Have evidence of identity in place for all clients, even those which have been on the books for many years

A summary of the developments between the second interim guidance for accountants issued by the CCAB in 2003 and Tech 07/07 (the post exposure draft but pre approval version of the CCAB guidance) was been developed as a technical release to assist ICAEW members with implementation. A further table tracking the changes resulting from the approval process is available.

ICAEW has been instrumental in developing guidance for the accountancy sector and continues to work with other accounting bodies, the FSA, Treasury and HMRC to ensure minimal duplication in respect of monitoring of firms for anti-money laundering purposes

In addition ICAEW representatives sit on a number of Treasury, Home Office and Serious Organised Crime Agency consultation panels.

ICAEW representations

Press coverage

The Business Law Staff brief journalists and write articles for publications in ICAEW Newsletters or external publications whenever the opportunities present.

Accountancy Magazine published a Special Report on Money Laundering in its January 2004 edition.