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AML - the essentials: April 2020

Issue 16 of our Anti-Money Laundering update includes a Guide to client due diligence during the Coronavirus outbreak, a new Source of wealth factsheet and a reminder of the recent changes to the Money Laundering and Terrorist Financing Regulations.

Recent changes to the Money Laundering and Terrorist Financing Regulations

New legislation came into force on the 10 January 2020. There are a few key areas that firms need to address in their policies and procedures:

  • Firms providing both direct and indirect tax advice are now captured by the rules (eg, repayment agents who act in the course of business as tax advisers, often referred to as High Volume Repayment Agents).
  • When you take on a limited company or LLP as a client, you must check that details of the Persons with Significant Control have been filed with the registrar (ie, Companies House) and report any discrepancies you identify. Read further guidance on how to report a discrepancy.
  • Confirmation that electronic ID verification can be considered as a reliable source of evidence, where the electronic process is free from fraud and provides sufficient assurance of the identity of the individual.

Economic Crime Levy

In the budget, the Chancellor announced the government’s intention to introduce a new levy on AML-regulated businesses to help fund the reforms committed to in the Economic Crime Plan (paragraph 1.58). Government will publish a consultation on the levy later this Spring.

OPBAS: Progress and themes from 2019

OPBAS has released its latest report on progress made in tackling money laundering over the past year. Among the key findings are that the accountancy and legal professions have made strong improvements in their supervision of anti-money laundering (AML) work.

Survey on costs vs benefits of client due diligence

The Consultative Committee of Accountancy Bodies, including ICAEW, have commissioned Populus, an independent research agency to capture views on the importance of the Anti-Money Laundering regime and the perceived costs and benefits of compliance. A number of interviews have already been conducted, and a short online survey will soon be issued. To ensure views of ICAEW members and firms are represented, please look out for the survey and encourage your colleagues to contribute.

Coronavirus: Guide to client due diligence and other issues to consider

As Coronavirus continues to disrupt business activity and social distancing becomes widespread, firms may have concerns over how this impacts their ability to comply with the money laundering regulations. ICAEW has issued a guide on how to adapt client take-on procedures to reflect more remote interactions with clients.

ICAEW, in conjunction with the Accountancy Affinity Group, has also issued guidance on other AML controls, policy and procedures issues to consider, as well as the risks that may arise due to Covid-19. 

Source of wealth factsheet

ICAEW has issued a factsheet to help ICAEW members and firms carry out client due diligence checks with a particular focus on establishing a client’s source of wealth. The factsheet includes information on when Source of Wealth requirements apply, what you need to do to establish and verify Source of Wealth and what should concern you.

Covid-19 Outbreak: AML Responsibilities of Accountancy Practices

The National Crime Agency (NCA) has published a SAR bulletin relating to COVID-19.

Red flag indicators of modern slavery and human trafficking

ICAEW, along with the other accountancy professional body supervisors, worked with the NCA to identify these red flags for the accountancy sector. Firms should read the indicators and watch the Operation Fort Panorama clip on page 9. Remember to use the SAR glossary code XXMSHTXX in any relevant SARs.

SARS in Action

The National Crime Agency has published the latest edition of its newsletter SARs In Action. This edition includes articles on FinTech and Digital Assets.

Updates to the AML Guidance for the Accountancy Sector

Following the implementation of the Fifth Money Laundering Directive, work is underway to update the CCAB AML Guidance for the Accountancy Sector to reflect the changes. As this guidance is HM Treasury approved, the updates will also be sent to them for endorsement before full publication.

New ICAEW webpages – AML supervision

ICAEW has published new resources on ICAEW’s role as an AML supervisor. They include information on our approach to supervision and what is required of an ICAEW AML supervised firm.

COVID-19: Quality assurance monitoring and regulatory support

Latest changes to monitoring procedures and how we can help.

COVID-19: Professional conduct and investigation guidance

Expectations of firms / members and our proportionate approach.

Regulating in the public interest

The ICAEW Regulatory Board (IRB) has published its 2019 annual report. Public interest and transparency remain at the forefront of everything the IRB does. 

The Professional Indemnity Insurance Committee is recruiting

The Committee is looking for non-lay members with technical knowledge of PII or risk management experience.

PII - mind the gap

Our latest advice on PII and the importance of making sure there are no gaps in your PII cover.

Helplines and support

During the Coronavirus outbreak and while ICAEW offices are closed, we have put together a summary of the best ways to contact us. In particular, please ensure all correspondence is emailed until further notice, as the distribution of postal correspondence may be significantly delayed.

Coronavirus Hub

ICAEW is collating resources to offer support and information to members and firms as conditions unfold.

COVID-19: support for businesses

Increased support includes unlimited loans and guarantees to help manage staff wages and cashflow during the pandemic.