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TECHNICAL ADVISORY SERVICES HELPSHEET

Anti-money laundering tipping off

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Published: 01 Mar 2019 Updated: 07 Jan 2021 Update History

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Contents

Technical helpsheet which aims to help answer some common questions relating to tipping off when money laundering is suspected.

Introduction

This helpsheet has been issued by ICAEW’s Technical Advisory Service to help ICAEW members understand what tipping off is and how to avoid it.

Members may also wish to refer to the following related helpsheets and resources:

Tipping off

Tipping off is an offence under section 333A the Proceeds of Crime Act 2002. It is committed when a relevant employee in the regulated sector discloses that:

  • A suspicious activity report (SAR) has been made and this disclosure is likely to prejudice any subsequent investigation; or
  • An investigation into allegations of money laundering or terrorist financing (MLTF) is underway (or being contemplated) and this disclosure is likely to prejudice that investigation.

No tipping off offence is committed if the relevant person did not know or suspect that their disclosure was likely to prejudice any subsequent investigation.

What is not tipping off?

Section 6.3 of the CCAB Anti-money laundering guidance for the accountancy sector confirms that no disclosure offence is committed if:

  • A relevant employee discusses the matter with another relevant employee of the same undertaking (internal discussions do not constitute tipping off);
  • A relevant employee attempts to dissuade their client from conduct amounting to an offence; or
  • Enquiries are made of a client regarding something that properly falls within the normal scope of the engagement or business relationship.

In each of these cases, care should nevertheless be taken. Further example are provided in the CCAB Anti-money laundering guidance for the accountancy sector.

Frequently asked questions

The following questions and answers are designed to help with some of the more common questions relating to tipping off.

1. I have found some invoices that my client has not included in the information for their tax return. How do I approach this without tipping off?

Normal commercial enquiries (perhaps to understand a particular transaction) would not generally lead to tipping off, however enquiries should be confined to what is required by the ordinary course of business. It is perfectly normal for a professional accountant to point out anomalies, omissions or errors. For example, if you discover an invoice that has not been included on a client’s tax return, then the client should be asked about it.

You should not attempt to investigate matters unless to do so is within the scope of the work commissioned. It is important to avoid accusations or suggestions of guilt.

2. I do not believe my client’s tax affairs are up to date. I feel I should advise them of the consequences but am concerned about tipping off. Can I do this?

Yes. You do not commit a disclosure offence if you attempt to dissuade your client from criminal conduct. This would include giving advice on the consequences of, for example, under declared income. Ordinarily, if you have advised both orally and in writing regarding the consequences, and the client won’t address the issue, you would cease to act and consider a SAR, though you must not advise the client of the latter.

3. I disengaged from an ex-client following submission of a SAR. I have now received a professional enquiry letter from the incoming accountants. What do I say?

Paragraph R320.7B of the ICAEW Code of Ethics confirms that if you have made one or more suspicious activity reports, you must not disclose that fact to the prospective accountant. You should therefore avoid answering queries that relate specifically to suspicions of money laundering.

In responding to the professional enquiry, you should nevertheless include relevant statements of fact (not opinions) that allow the incoming practitioner to form their own conclusion, or that may prompt them to make their own enquiries. Examples include:

  • We disagreed over the tax liability or VAT position;
  • The relationship of trust and confidence has broken down; or
  • We were unhappy submitting the accounts as instructed.

Further guidance is available in the helpsheet Change of professional appointment – Outgoing accountant.

4. I am resigning after being informed of a police investigation into my client. Can I give them this reason?

It depends. If your client is aware of, or is clearly already involved in the investigation, then it is difficult to see how that investigation would be prejudiced by you telling your client that you are resigning as a result.

However, if the information has come to you by other means (e.g. an approach by the police) then care must be taken as the client may not yet be aware, and telling them may therefore constitute tipping off.

5. My client appears on a sanctions list? Can I query this further, or offer it as a reason for resignation?

Yes. Sanctions lists are publicly available. However if you also had additional suspicions, or have made a SAR, you would not disclose this information.

If in doubt seek advice

ICAEW members, affiliates, ICAEW students and staff in eligible firms with member firm access can discuss their specific situation with the Technical Advisory Service on +44 (0)1908 248 250 or via webchat.

Terms and conditions

© ICAEW 2021  All rights reserved.

ICAEW cannot accept responsibility for any person acting or refraining to act as a result of any material contained in this helpsheet. This helpsheet is designed to alert members to an important issue of general application. It is not intended to be a definitive statement covering all aspects but is a brief comment on a specific point.

ICAEW members have permission to use and reproduce this helpsheet on the following conditions:

  • This permission is strictly limited to ICAEW members only who are using the helpsheet for guidance only.
  • The helpsheet is to be reproduced for personal, non-commercial use only and is not for re-distribution.

For further details members are invited to telephone the Technical Advisory Service T +44 (0)1908 248250. The Technical Advisory Service comprises the technical enquiries, ethics advice, anti-money laundering and fraud helplines. For further details visit icaew.com/tas.

Changelog Anchor
  • Update History
    01 Mar 2019 (12: 00 AM GMT)
    First published
    07 Jan 2021 (12: 41 PM GMT)
    Changelog created, helpsheet converted to new template
    07 Jan 2021 (12: 42 PM GMT)
    Minor updates only for links to published draft CCAB guidance.
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