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 subject 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.
How to apply for AML supervision by ICAEW
If your firm is not already part of the PA scheme, you can apply to us for AML supervision.
If your firm already has a C00 number and has completed an annual return in the last 12 months, please send us:
- a separate Fit and Proper Declaration completed by every principal, nominated money laundering reporting officer and shareholder (holding more than 20% of the shares) who is not an ICAEW member or affiliate; and
- a completed Ownership and control form
If your firm doesn’t have a C00 number or you haven’t completed an annual return in the last 12 months, please send us:
- a completed application form;
- a separate Fit and Proper Declaration completed by every principal, nominated money laundering reporting officer and shareholder (holding more than 20% of the shares) who is not an ICAEW member or affiliate;
- a copy of the last set of accounts of the firm and any connected entities listed in section F; and
- examples of recent promotional materials and/or advertisements
Please email your completed forms to email@example.com or send them to us by post.
Quality Assurance Department (AMLR)
321 Avebury Boulevard
Please refer to these guidance notes as you complete the forms.
When we receive your application
We will review the information you've provided in your application to confirm your firm requires supervision and is eligible to be supervised by ICAEW. We then draw up a standard contract. This includes the following obligations on the firm:
- to act in accordance with the Practice Assurance standards;
- to comply with the Code of Ethics and the Clients’ Money Regulations and the Disciplinary Bye-laws as if a member firm, contracted firm or member as appropriate.
- to demonstrate a commitment to comply with the Money Laundering Regulations 2017; and
- to complete an annual return, be supervised and monitored.
We agree fees on a firm-by-firm basis based on individual circumstances and risk, which we assess during the application process. For example, under normal circumstances a firm with one ICAEW principal and one non-ICAEW member principal should expect to pay no more than £354 (plus VAT) per year.
We charge an application fee when you submit the signed contract to ICAEW. This is calculated on a pro-rata basis for the period from the start of the contract to 31 December. We will then bill the annual fee on a calendar-year basis.
What being supervised via a contract means for you
We will conduct a monitoring visit typically once every four to eight years. The timing is determined by an agreed cycle according to the size of the firm. We may visit large or high-risk firms more frequently.
Use of ICAEW legend
After successfully addressing any matters identified in your firm’s monitoring visit, your firm can apply for approval to use the legend ‘A member of the ICAEW Practice Assurance scheme’.
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.
Non-executive directors, trustees, interim managers and sub-contractors
Following considerable input from ICAEW, HM Treasury has agreed to certain changes in the interpretation of the scope of MLR17. These changes are good news for most of our non-executive directors, interim managers and those involved in sub-contracting accountancy services. A number of individuals and firms, that would have had to comply, are now outside the scope of the regulations.
HMRC guidance identifies businesses which are required to register with HMRC, and gives guidance on how to register.
Registration - Are you in or out?, sets out what these policy changes mean for ICAEW members. In summary:
- Directors (whether non-executive or other) who provide services to high-risk jurisdictions or high-risk sectors require supervision but acting through a personal service company will not automatically be brought into scope.
- individuals who provide accountancy services as subcontractors will not be required to register if they:
- subcontract to an accountancy service provider;
- do not provide services directly to the clients; and
- have evidence in the form of a contract that they are included in, and comply with, all the sub-contracting firm's anti-money laundering procedures and policies;
- Trustees providing services by way of business will not be caught if they act for certain low risk trusts; eg,
- straightforward testamentary trusts (including for children up to 25, partners/spouses, disabled persons or provisions for charity); or
- express lifetime trusts for disabled persons; and
- occupational pension schemes and employee share schemes.
If you need supervision but do not meet the definition of a member firm, or do not require a practising certificate, you can apply to ICAEW for anti-money laundering supervision. We require at least one principal in the firm to be an ICAEW member or an affiliate member or the firm must be owned by a member firm.
Visit the how to apply to ICAEW for anti-money laundering supervision section above to find out what being supervised by ICAEW will mean for you.
If you come across an accountancy service provider (ASP) or trust and company service provider (TCSP) that does not appear to be regulated under the Money Laundering Regulations 2017 or appears to be ignoring the regulations, and you want to report it confidentiality, you can do one of the following:
- Contact their anti-money laundering supervisor
- Contact the HMRC MLR Registration Team on their confidential enquiry line +44 (0)1702 366 312
Information you can disclose
The more detail you can give, the easier it will be for us to consider what our response should be.
The following information is all useful:
- The names of any individuals involved.
- Any key dates you know about.
- The ‘how’, ‘what’ and ‘where’ of any supporting documents or evidence.
- The type of wrongdoing and who else knows about it.
Anti-money laundering - the essentials
ICAEW's professional standards team produces 'Anti-money laundering - the essentials', a newsletter to help you keep up-to-date on the key changes in the money laundering regime and help inform your risk assessment, policies and procedures.
ICAEW regulation and the ICAEW Regulatory Board