July 2022 Statutory Instrument to amend Money Laundering Regulations
The government has published its response to the HMT consultation entitled: Amendments to the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 Statutory Instrument 2022, which concluded in October 2021. The Statutory Instrument has been laid in Parliament.
Register of Overseas Entities Regulations published
On 23 June 2022, BEIS published the draft Register of Overseas Entities (Delivery, Protection and Trust Services) Regulations 2022 and explanatory memorandum. The Register and memorandum mandate digital delivery to the register and the protection regime (ie, permitting certain information to be hidden from the public register and to include corporate trustees). They also correct provisions missed from the drafting of the Economic Crime Act earlier in the year.
Why do we need the Economic Crime Bill 2.0?
The Economic Crime Act was swiftly brought in for the UK to respond effectively to Russia’s actions in Ukraine and now the second Economic Crime Bill is on its way.
Major changes to government sanctions’ enforcement powers
New powers brought in through the Economic Crime Act will bolster the Office of Financial Sanctions Implementation's ability to penalise individuals in breach of sanctions rules.
HM Treasury review of the UK’s AML regime
Government has published a review of the UK’s AML regulatory and supervisory regime.
The documents make a thorough assessment of the UK’s money laundering controls and outline areas of focus going forward. These include a commitment to consult on some key proposals for change.
The review proposes further areas of possible reform, most notably in how firms are supervised for AML.
It also commits to consult on some smaller changes to the regulations, where black-and-white inherited EU rules prevent the UK from taking a more risk-based approach to prevention. This includes looking at the enhanced due diligence required for domestic politically exposed persons.
Changes to the UK’s high risk third countries
Malta has been removed from the list and Gibraltar has been added.
Guidance on CDD on law firms
This guidance has been published following questions from firms about the level of due diligence required for UK law firms, and whether ID is required for individual solicitors.
Criminals are increasingly using and incorporating cryptoassets into money laundering methodologies. Join the National Crime Agency and anti-money laundering experts as they help you spot the red flags and money laundering methodologies used.
Listen again: Client verification webinar
Listen again to the recent anti-money laundering (AML) webinar. The expert panel use case studies to demonstrate the stages of client verification and how these should link to your AML risk assessment.
Key considerations on part two of the Economic Crime Act 2022
The Economic Crime Act 2022 became law in March and part two of the bill is incoming. From risks to required changes, we explore key considerations for accountants on the issue.
The Consultative Committee of Accountancy Bodies (CCAB) has published the latest version of its Anti-Money Laundering Guidance for the Accountancy Sector, together with the Tax Appendix and the Insolvency Appendix, following HM Treasury’s approval of all three documents.
Anti-money laundering helpline
ICAEW members can phone in anonymously if they wish to speak to an advisor about suspected illegal activity or any matter that may trigger a need to submit a suspicious activity report.
UKFIU SARs In Action magazine
Read the July edition of the UK Financial Intelligence Unit (UKFIU) magazine.
UKFIU SARs glossary codes
Updated glossary codes now available.
Raise an AML concern
ICAEW economic crime hub
ICAEW client screening service
Use our client screening service to check individuals or entities against global risk and compliance data. This service is free of charge but only available for ICAEW members and ACA students. We will carry out a maximum of three name checks from a single firm or member per week.
Sanctions updates and resources
Prohibition on Provision of Accountancy Services to Russia comes into force
The Government has now published "The Russia (Sanctions) (EU Exit) (Amendment) (No. 14) Regulations 2022", which implements the ban on the export of accounting services.
The definition of ‘accountancy services’ within the regulations is taken from the CCPC Code of 1990 (UN Central Product Classification) but doesn’t currently include statutory audit. Section 13 inserts Chapter 6B, ‘Professional and Business Services’, which defines “accounting services” as follows:
- Accounting review services, which are services involving the review by a person of annual and interim financial statements and other accounting information, but excluding auditing services.
- Compilation of financial statements services, which are services involving the compilation by a person of financial statements from information provided by a client, including preparation services of business tax returns when provided together with the preparation of financial statements for a single fee, but excluding such preparation services of business tax returns when provided as a separate service.
- Other accounting services such as attestations, valuations, preparation services of pro forma statements.
- Bookkeeping services, which are services consisting of classifying and recording business transactions in terms of money or some unit of measurement in the books of account, but excluding bookkeeping services related to tax returns.
OFSI and NCA red alert: evasion typologies
In conjunction with the Office of Financial Sanctions Implementation (OFSI), the JMLIT+ Sanctions Facilitators Cell, law enforcement, private industry and regulators, the NCA has issued a 'Red Alert' on financial sanctions evasion typologies by Russian elites and enablers.
The purpose of the alert is to provide information from law enforcement and the legal and financial services sectors on some of the common techniques designated persons and their UK enablers are suspected to be using to evade financial sanctions.
Giles Thompson, Director HM Treasury’s Office of Financial Sanctions Implementation, said:
“Since the start of the Russian invasion of Ukraine, the Government has introduced an unprecedented quantity of sanctions designations. OFSI has worked tirelessly to ensure that these sanctions are understood, implemented and enforced, and this diligence has been matched by colleagues across the private sector. This latest collaboration outlines the significant exposure that many sections of industry have to sanctions evasion, and given the nature of the risks identified, is something we will all need to be increasingly vigilant to.”
OFSI Russia guidance updated
The guidance has a new section on investments in Russia on page 5 to 6. It also updates the FAQs section on page 8 to 11 to reflect the Russia financial sanctions that have come into force since the Russian invasion of Ukraine.
The update coincides with the Amendment 12 Regulations: Russia (Sanctions) (EU Exit) (Amendment) (No. 12) Regulations 2022 coming into force.