AML the essentials, issue 18 contains updated CCAB guidance and explanatory notes, a reminder on furlough fraud, and clarification on reporting discrepancies on the People of Significant Control register.

New CCAB guidance

The CCAB has published updated guidance for the January 2020 amendments of the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017. This guidance has not yet been approved by HM Treasury. Once this is received, a final version will be published. The Guidance is relevant to anyone who provides audit, accountancy, tax advisory, insolvency, or trust and company services in the UK.

• Read the guidance in full

CCAB explanatory notes

The CCAB has also published some explanatory notes that summarise the key changes. These include:

• A new appendix of case studies that explain who the beneficial owners would be for a range of client types/structures, for the purposes of Client Due Diligence (Appendix E)
• Expansion of the 'reasonable excuse' defence for failing to make a SAR. (Subject to HM Treasury approval.)
• Proposed pragmatic interpretations of the requirement to report discrepancies in the PSC register to Companies House. (Subject to HM Treasury approval.)
• Clarification that electronic Due Diligence systems may be considered a reliable method, subject to meeting certain conditions.
• The CCAB have interpreted (subject to HM Treasury approval) who should be considered an 'agent' trained in Client Due Diligence.
• An expanded list of red flags of money laundering or terrorist financing when identifying and risk assessing a client.

• Read the explanatory notes

Reporting discrepancies in the People with Significant Control register

HM Treasury has clarified several grey areas on the obligations of all AML regulated practices. The clarification – courtesy of a statutory instrument makes it clear that members working in an AML-regulated firm are obliged to only report discrepancies they identify in the PSC register that relate to new clients and to do this only once.

Read the Insights article in full to find out more, including:

• What are the obligations to report discrepancies in the People with Significant Control register?
• What constitutes a discrepancy?
• When should a discrepancy be reported?
• Time lags in updating the registers
• Do overseas branches and subsidiaries have to report discrepancies on UK entities they are taking on?
• How do you report a discrepancy?

• Read the article

2020 AML monitoring report reminder

A reminder that our 2020 AML monitoring report is available and contains the latest advice from our Quality Assurance team, particularly useful if you have an upcoming monitoring review.As well as analysis of our monitoring visits the report also looks forward and includes details of changes to our approach. We have also recorded a webinar that takes you through the report if you would prefer to listen to our findings.

• Read the report or watch the webinar

2020 AML supervision report

We also put together a supervisory report which sets out how we discharge our obligations as a supervisory authority and contains information we are required to publish under Regulation 46A.

• Read the report

What is money laundering?

ICAEW and IFAC series

This series aims to help professional accountants enhance their understanding of how money laundering works, the risks they face, and what they can do to mitigate these risks and make a positive contribution to the public interest.

• Read the first instalment of the ICAEW/IFAC series on AML – what is money laundering?
• Read instalment 2: A risk-based approach

CCAB report on phishing and insider fraud

The article covers the following topics:

• Phising and how the phising message may arrive. 
• Examples which provide a clue that the message is not genuine. 
• Examples of 'vishing' - the use of the voice to obtain information, and ways to recognise a vishing attack.
• A Public Sector Insider fraud case study that is designed to help you identify red flags.
• Simple steps to take to protect yourself and your clients.

• Read the report

Furlough Fraud

Fraudulent COVID-19 claims: what to do if you suspect your client

There are various government schemes to provide financial support for businesses during the pandemic but these are unfortunately open to abuse. ICAEW firms are well placed to not only identify and report fraud, but in some cases to prevent it happening in the first place.

• Insights article
• ICAEW guidance

Law Society Scotland webinar

Watch the Law Society Scotland webinar on submitting high-quality SARs.

• Watch now

FINCEN leaks 

The CCAB has published an article on the FINCEN leaks and what accountancy firms should do in response.

• Read the article

National Crime Agency resources

The NCA has published a number of important resources over the past three months. We strongly recommend that you read the documents and use the information to inform training and any changes to your risk assessment procedures.

The resources include:

• SARs In Action – July 2020 edition
• SARs in Action – September 2020 edition
• SARs FAQs – July 2020
• SARs Reporting Booklet – July 2020

You can find all of the relevant documents on the NCA’s website

Useful Links

• Insights: Follow the money
• Suspicious Activity Reporting Guidance
• Government response to the Corporate Transparency and Register Reform consultation.
• Raise an AML concern