How we cracked down on money laundering from home
2 February 2021: Michelle Giddings, head of AML and operations and chair of the 2021 AML Supervisors Forum, outlines the measures ICAEW has taken to tackle anti-money laundering compliance during lockdown.
For those of us who combat economic crime, it came as little surprise that criminals targeted the circumstances created by the coronavirus pandemic and subsequent lockdowns to launder money, instigate cyberattacks and finance terrorism.
Experience has taught us that in times of serious change and crisis any form of disruption can weaken existing systems and controls set up to prevent criminal activity. This leaves the door open for opportunists to take advantage of the situation to launder money that is then used in serious crimes such as terrorism or trafficking.
As the largest professional supervisory body for accountancy in the UK, ICAEW currently supervises and monitors 11,000 businesses for anti-money laundering compliance. We use a risk-based approach to ensure accountancy firms are compliant with money laundering regulations and take disciplinary action against those that aren’t. We take a hands-on approach to tackling money laundering and have carried out over 20,000 monitoring reviews since the team was founded in 2007.
Given the heightened risk, it was crucial we remained vigilant. The first few weeks of the pandemic set the wheels in motion: many of the businesses we regulate were overwhelmed and asked to postpone scheduled visits as they struggled to adapt. The most common issues were sickness and a lack of access to files and to suitable technology, rather than a reluctance to engage.
As we too adapted, circumstances gave rise to operational difficulties. For example, the ability to conduct on-site monitoring visits to firms considered at higher risk of money laundering, which were no longer possible because of social distancing rules.
Government advice also changed frequently in the earlier stages of the pandemic, so we had to remain flexible and update our plans while maintaining our work to identify risk.
A key part of our work was to replicate our robust approach remotely, maintaining the same due diligence and high levels of scrutiny. To do this, we designed a remote-visit policy based on our on-site visit methodology, which we could then perform via video-call or teleconferencing. We also worked with firms to identify how best to obtain the key documents necessary for our review, which ranged from secure online document sharing software to courier. In the fourth quarter of 2020, when the country was in various levels of lockdown, we carried out 455 anti-money laundering monitoring reviews, 17% of which were at medium or high-risk firms.
We also continued to investigate complaints from the public and information obtained from law enforcement. During the fourth quarter of 2020, we excluded one member for enabling money laundering, expenses fraud and non-cooperation. We sanctioned a further 15 firms for anti-money laundering compliance weaknesses, including firms that had failed to put right weaknesses we had identified at a previous review.
And although all ICAEW staff were working from home, we continued to take calls to the anti-money laundering helpdesk, received annual returns, reviewed disciplinary cases and criminal record checks, and issued best practice guidance on due diligence, furlough fraud and the submission of good quality suspicious activity reports (SARs).
As we look forward to lockdown eases and people gradually return to working in offices, we won’t lose sight of what we’ve achieved over the last few months. We don’t know what the future will bring – but whatever it does, we will continue to target money laundering and the drivers of economic crime.
ICAEW members can phone ICAEW’s Anonymous Anti-Money Laundering helpline anonymously if they wish to speak to an adviser about suspected illegal activity or any matter that may trigger a need to submit a suspicious activity report. Call +44 (0)1908 248 250 (Option 2) between 9am and 5pm Monday to Friday (10am on Wednesday) and state your wish to make an anonymous enquiry.
Further anti-money laundering resources are available at www.icaew.com/moneylaundering