The below information is based on the results of our 2021/22 anti-money laundering monitoring reviews.
1. Updating customer due diligence
The most common finding from our 2021/22 AML monitoring reviews related to updating customer due diligence. Where we made this finding, firms were not performing, and updating, their customer due diligence throughout the duration of the client relationship.
2. Customer due diligence on new clients
Customer due diligence (CDD) is a process of checks designed to identify, risk assess and verify your client to make sure they are who they say they are. We found that some firms don’t perform CDD on all their new clients.
3. Risk assessing clients
The client risk assessment considers the risks identified in your firm-wide risk assessment and directs the amount and type of information you need to verify the identity of the client. Our third most common finding is that the firm had failed to perform a risk assessment of the on some or all of their clients.
4. Firm-wide risk assessments
The client risk assessment considers the risks identified in your firm-wide risk assessment and directs the amount and type of information you need to verify the identity of the client. We found that some firms had either not performed a firm-wide risk assessment, or the firm-wide risk assessment had not identified all the risks.
5. Reporting discrepancies in PSC register
If you identify a discrepancy between the information you gather while carrying out your regulatory obligations and the information held at Companies House, you must report that discrepancy to Companies House or HMRC.
6. Review of policies, controls and procedures
You should plan to regularly review the effectiveness of your AML policies and procedures It doesn’t need to be an external review but you should design this to be as independent as possible, given the size and nature of your firm.
7. Written procedures
Firms should be setting out clear procedures on how they comply with the Money Laundering Regulations. We ask to see our firms’ written procedures on monitoring reviews.
The Money Laundering Regulations stipulate that a relevant firm must provide AML training to all staff and agents. Training ensures that staff/agents are aware of their suspicious activity reporting obligations and understand and how to comply with a firm’s AML policies.
9. Criminal record checks on BOOMs
A common AML compliance issue is when firms haven’t obtained criminal record certificates for key staff.
10. No AML supervisor
Where we find that a firm isn’t supervised, it is normally because the firm thinks it is an ICAEW member firm, but it isn’t.