Regulatory update
Electronic verification
We are aware that some providers of electronic verification and facial recognition software are promoting their software by stating that its use is mandatory. We would like to reassure firms that this is not true and you can continue to use a range of verification tools (including obtaining copies of identity documentation) to comply with customer due diligence requirements on a risk-based approach.
Our AML supervision team discussed electronic verification during our 2023 webinar:
Money Laundering Regulations consultation
HM Treasury has published a consultation on improving the effectiveness of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (the MLRs), which place requirements onto a range of businesses to identify and prevent money laundering and terrorist financing.
The consultation covers four core themes:
- Making customer due diligence more proportionate and effective
- Strengthening system coordination
- Providing clarity on scope of the MLRs
- Reforming registration requirements for the Trust Registration Service
HM Treasury is keen to hear from a wide range of stakeholders including regulated businesses and their customers.
- Read the consultation
- Respond via the online form (alternative ways to respond are included in the consultation document)
- HMT event: Roundtable to discuss the consultation, Tuesday 7 May 11am (open to all sectors and stakeholders)
The cost of compliance
In parallel with this consultation, HM Treasury is running a survey on the cost of compliance with the MLRs. This will help us to understand better how regulated businesses comply with the regulations and to assess the impact of future changes to the MLRs. We are keen to receive responses from a wide range of regulated businesses, from large firms to sole traders.
Change to regulations: politically exposed persons
A new Statutory Instrument came into force on 10 January 2024, which puts into legislation that a domestic politically exposed person (PEP) has a lower starting point for risk than a foreign PEP and, if no enhanced risk factors are present, the extent of customer due diligence for a domestic PEP should be lower than a foreign PEP.
CCAB Anti-money Laundering Guidance for the Accountancy Sector
Revised CCAB guidance was published in June 2023. Changes included information on proliferation financing and ‘ongoing’ discrepancy reporting requirements. Make sure you are using the most up to date version of this key guidance.
Updated High Risk Third Countries list
HM Treasury has updated the list. Enhanced due diligence is mandatory for clients based in some countries (or for any transactions involving them).
New powers for Companies House
New powers came into effect on 4 March. These changes were made under the Economic Crime and Corporate Transparency Act and included:
- greater powers to query information and request supporting evidence
- stronger checks on company names
- new rules for registered office addresses (all companies must have an appropriate address at all times – they will not be able to use a PO Box as their registered office address)
- a requirement for all companies to supply a registered email address
- a requirement for subscribers to confirm they’re forming a company for a lawful purpose when they incorporate, and for a company to confirm its intended future activities will be lawful on its confirmation statement
- greater powers to tackle and remove factually inaccurate information
- the ability to share data with other government departments and law enforcement agencies
New criminal offences and civil penalties will complement the measures.
Sanctions
New sanctions evasion alert
The National Crime Agency (NCA) issued an amber alert on financial sanctions evasion, and money laundering through the art storage sector.
The role of the MLRO
Share your experiences as an MLRO at a small firm
We are looking to speak to money laundering reporting officers at sole practices or smaller firms to inform our anti-money laundering communications and to share knowledge with other MLROs.
Suspicious Activity Reporting
New SARs Portal
The legacy SAR Online System has now closed. Should you need to submit a SAR, you must register for the SAR Reporting Portal, which should then be used as your firm’s sole reporting route. Additional registration and SAR submission guidance is available via the NCA SARs website.
There are a suite of resources to support firms using the new portal.
UK Financial Intelligence Unit Resources
The UKFIU has published new resources to support firms in improving the quality of the information they submit via suspicious activity reports:
- UKFIU Annual report
- The latest edition (Issue 24) of the UKFIU magazine 'SARs In Action'
- UKFIU podcast on SARs reporting in the accountancy sector (Michelle Giddings, ICAEW Head of AML is a panellist)
Reminders
PII requirements: What is changing on 1 September 2024?
Last year the ICAEW Regulatory Board, working collaboratively with the Professional Indemnity Insurance Committee (PIIC), launched a review of ICAEW’s insurance requirements. A consultation relating to proposed changes ran between 18 October and 14 December 2023. Following careful consideration of the feedback we received, some of the proposals are being taken forward and will come into effect on 1 September.
Access to AML Risk Bulletins
Although 'AML – the essentials' is sent to money laundering reporting officers (MLROs) and compliance principals (MLCPs), and any other individual who has subscribed, our Risk Bulletins are only sent to MLROs and MLCPs. This is in accordance with the handling instructions set out by the Joint Money Laundering Intelligence Taskforce. MLROs should disseminate the AML Risk Bulletins in line with the handling instructions and/or embed within the firm’s AML training.
Avoid losing access to your agent account
Failing to respond to an innocuous looking letter from HMRC can end up with your agent account being blocked.
Spotting Companies House scams
What to do if you think you've spotted a scam pretending to be from Companies House, and examples of scam emails, letters and telephone calls.
ICAEW client screening service
Obtain up to three client screening reports per week, checking against global risk and compliance data, including government sanctions, politically exposed persons, a wide range of watch lists and negative news profiles.