Your firm must be supervised by a supervisory authority if the Money Laundering Regulations apply to your business. This guide will help you to decide if you need to be supervised, whether ICAEW is your supervisory authority, or how you can apply if you do not have an AML supervisor.
Who needs to be supervised?
The Money Laundering Regulations apply to ‘relevant persons’ acting in the course of business carried on by them in the United Kingdom who are:
- auditors
- insolvency practitioners
- external accountants
- tax advisers
- trust and company service providers
By way of business
In most cases you’ll know whether you’re carrying out an activity by way of business. One way to determine if you are carrying out an activity by way of business is to consider whether you are engaged in public practice. If you are in public practice, you will need to be supervised.
Carrying out activity in the UK
You’ll usually know if you’re carrying out activity in the UK. Generally, we expect you and your staff to be performing the work from a UK office or premises. However, the Money Laundering Regulations also regard a firm as carrying on business in the UK, even if they would normally not be considered as such, if both of the following apply:
- your registered office, or head office if you do not have a registered office, is in the UK
- the day-to-day management of your business is by the registered or head office or another office maintained by you in the UK.
For example, if you manage your business from a UK premises, which is your registered office, or head office, but you have out-sourced some work to a business outside of the UK, you would be considered to be carrying on business in the UK and would be subject to the Money Laundering Regulations.
If you carry out business in the UK, you’ll need to register under the regulations in the UK. It does not matter where your customers are located.
Types of service provided
The Money Laundering Regulations define the terms auditor, insolvency practitioner, external accountant, tax adviser and trust and company service provider. Further information is also given in AML Guidance for the Accountancy Sector (AMLGAS), also known as the CCAB guidance. ICAEW also considers its definition of public practice when considering if services fall within the scope of the Money Laundering Regulations.
Who is your AML supervisor?
Under the Money Laundering Regulations, ICAEW is the supervisory authority for relevant persons who are members of ICAEW, or regulated or supervised by it.
In practice, this means that we are the supervisory authority for ICAEW member firms. We automatically supervise our member firms under the Money Laundering Regulations through ICAEW’s Practice Assurance scheme – but it is important that you have registered your firm with us. You can register your firm with the Firms team.
It is also important that you check that your firm meets the definition of an ICAEW member firm.
What if you don’t meet the definition of an ICAEW member firm?
ICAEW can also supervise firms that don’t meet the definition of a member firm but are within the scope of the Money Laundering Regulations, via a contractual arrangement. Firms must meet the following criteria to apply:
- the firm must carry out its business in the UK; and
- at least one principal at the firm (ie a director, member of the LLP or partner in a partnership) must be an ICAEW member or affiliate member, or the firm must be owned by a firm which has at least one ICAEW member or affiliate member as a principal.
We can also supervise firms carrying out business in the UK where at least one principal at the firm is a member of a GAA body.
There are many situations where firms are within the scope of the Money Laundering Regulations, and require AML supervision, but are not automatically supervised and subject to ICAEW’s Practice Assurance scheme because:
- the scope of the regulations is wider than ICAEW’s requirement for a practising certificate (PC). Firms may be providing services within the scope of the regulations (eg, company formation) for which a PC is not needed.
- Members may hold a PC but they are working in non-member firms. So although they may be individually subject to Practice Assurance, the firm is not. ICAEW members should ensure that AML supervision is in place for the firm.
AML supervision for insolvency firms
ICAEW is the supervisory authority for ICAEW member firms. This supervision covers all accountancy services and firm-wide areas, including insolvency.
Each ICAEW insolvency practitioner (IP) should take care to ensure that their firm has a supervisory authority. If an ICAEW IP is working in a non-member firm, we need to know who the firm-wide AML supervisor is. If the firm doesn’t have an AML supervisor, non-member firms can apply to ICAEW for firm-wide AML supervision if one of the principals (partner, member of an LLP or director of a corporate entity) is an ICAEW member or affiliate.
Unsure about who your supervisory authority is?
This flowchart is used by the Accountancy AML Supervisors Group (AASG) to help firms/ICAEW PC holders identify who their supervisory authority should be. Please note it does not mean that AML supervision is automatically in place with that supervisory authority. For example, the flow chart indicates that ICAEW is the AML supervisor of a non-member firm, that is audit-registered or DPB-licensed with us. However, the firm must apply for an agreement for Practice Assurance services as it is not an ICAEW member firm and not included in the Practice Assurance scheme.
Alternatively use this interactive tool to help you understand who is your supervisory authority:
If you have any questions, you can call ICAEW's Technical Advisory Helpline on +44 (0)1908 248 250.
Acting as a tax agent or applying to be an authorised corporate service provider (ACSP)
To register as an ACSP at Companies House, or a tax agent with HMRC, you must have a supervisory body.
ICAEW is the supervisory authority for ICAEW member firms. Your firm must meet the definition of an ICAEW member firm and carry on business in the UK. You can register your firm with the Firms team.
ICAEW can also supervise firms that don’t meet the definition of a member firm but are within the scope of MLR17, via a contractual arrangement. Firms must meet the following criteria to apply:
- the firm must carry out its business in the UK.
- at least one principal at the firm (ie a director, member of the LLP or partner in a partnership) must be an ICAEW member or affiliate member, or the firm must be owned by a firm which has at least one ICAEW member or affiliate member as a principal.
You will be required to supply specific and accurate details about your firm to Companies House as part of your ACSP application. This includes its name, address and email, as well as your company number if you’re a limited company, the name of your AML supervisory body and your AML membership number or ID. Find out more about how to apply to be an ACSP:
If you wish to register as a tax agent with HMRC, then HMRC will require proof that ICAEW is your supervisory authority. You can email AMLR@icaew.com to request a letter from us that confirms your supervisory status.
We do share limited data about our supervised population (firm name, address and firm number) with both Companies House and HMRC so that they can perform checks on the information you provide in your application.