Anti-money laundering supervision
The Money Laundering Regulations 2017 strengthen enforcement of the anti-money laundering legislation.
Changes to MLR 17 – effective 26 June 2018: Under Regulation 26 of MLR17, ICAEW must approve all beneficial owners, officers and managers (BOOMs) in our supervised firms. Any person who continues to be a BOOM after 26 June 2018 without approval (ie any person with relevant unspent convictions) will be committing a criminal offence punishable by imprisonment of up to three years and / or a financial penalty. Access more information.
HMRC TCSP register: Under Regulation 54 of MLR17, HMRC must maintain a register of all relevant persons who are trust or company service providers (TCSPs) that are not already registered with FCA. Access more information.
Supervision by ICAEW
ICAEW is a supervisory authority under Schedule 3 to the Money Laundering Regulations 2017 (MLR17). HM Treasury recognises the Practice Assurance scheme as a suitable means for supervising our members. We have no alternative way of offering supervision to member firms or non-member firms.
Firms that provide trust and company services as part of their main accountancy practice, and who meet the definition of a member firm, will be supervised by ICAEW for all their work.
Supervision of firms to Practice Assurance
We automatically supervise our member firms under MLR17 through ICAEW’s Practice Assurance (PA) scheme. The scheme provides a framework of quality assurance principles, and offers practice support and advice, together with monitoring visits.
There are many situations where members are within the scope of MLR17 but are not automatically supervised and subject to ICAEW’s PA scheme because:
The scope of the regulations is wider than ICAEW’s requirement for a practising certificate (PC). Members may be providing services within the scope of the regulations (eg, company formation) for which a PC is not needed.
Members may be providing accounting or other services in a way that does not require a PC; eg, as interim managers.
Members may hold a PC but they are working in non-member firms. So although they may be individually subject to PA, the firm is not.
Firms that don’t meet the definition of a member firm but are within the scope of MLR17, can apply to ICAEW to join the PA scheme and register for anti-money laundering supervision. In order to apply, at least one principal in the firm must be an ICAEW member or an affiliate member, or the firm must be owned by a firm which has at least one ICAEW member or affiliate member as a principal.
Unsure about who your supervisory authority is?
ICAEW has prepared a flowchart, used by the Anti-Money Laundering Supervisors Forum, to help firms identify who their supervisory body should be. The flowchart will be of particular use if a member firm, or PC holder, thinks there may be more than one supervisory authority that can supervise their anti-money laundering activities.
It is important to note that the flowchart only denotes who the supervisory authority should be, not how they will supervise. For example, ICAEW is the AML supervisor of a non-member firm, that is audit-registered or DPB-licensed with us but the firm must apply for an agreement for Practice Assurance services as it is not a member firm and therefore not included in the Practice Assurance regime, which is our only recognised scheme for AML supervision.
If you have any questions about how to apply the flowchart to your circumstances, you can call Advisory Services on +44 (0) 1908 248 250
FCA authorised firms
The Financial Conduct Authority (FCA) has stated it will supervise our firms that are also authorised firms under the Financial Services and Markets Act for FCA-authorised activities. We will supervise non-authorised activities through our PA scheme for our member firms. If your firm is not a member firm, it will need to apply for separate supervision of the non-regulated work. We continue to liaise with the FCA and other supervisors to prevent overlapping AML/CFT regulation.