General AML information and common FAQ’s
Your first requirement before commencing work is to be registered for compliance supervision with an appropriate supervisor.
To commence in business without the appropriate registration means you are committing a criminal offence. The penalty for this is up to a maximum of £5,000 if the breach was a failure to take reasonable steps. However this can be increased if the breach was deliberate.
In simple terms there are four main things which all firms must do and be able to demonstrate compliance to a Supervisor, they are:-
You must ensure that all these policies & procedures, evidence of identity and account opening procedures, internal & external reports and any other AML procedural matters are documented correctly and records kept for a minimum of 5 years.
The Office of Fair Trading (OFT) is the supervisory authority for estate agents who fall under S1 of the Estate Agents Act 1979. Enforcement and monitoring visits will be conducted by officers of TSS locally.
HM Treasury approved Professional Bodies for supervisory purposes are;
1. Association of Chartered Certified Accountants
2. Institute of Chartered Accountants in England and Wales
3. Institute of Chartered Accountants in Scotland
4. Institute of Chartered Accountants of Ireland
5. Association of Accounting Technicians
6. Association of International Accountants
7. Association of Taxation Technicians
8. Chartered Institute of Management accountants
9. Chartered Institute of Public Finance Accountants
10.Chartered Institute of Taxation
11.Insolvency Practitioners Association
12.Institute of Certified Bookkeepers
13.Institute of Financial Accountants
14.International Association of Bookkeepers
Members of the above professional bodies will be supervised for complaince under their relevant professional assurance scheme and subject to the relevant members disiplininary codes of prectice.
All other firms undertaking relevant activity by the way of business in the accountancy sector will register with HMRC for supervison
POCA is the UK’s primary money laundering legislation.
Chapter 7 sets aout the predicate offences of money laundering applicable to all, S327 Conceals, S328 Arrangement and S329 and Aquires.
Chapter 7 is also the area that concerns the professional in the regulated sector. It places a responsability on all employees in the regulated sector to report suspicious activity when they have “reasonable grounds to suspect” that money laundering is taking place. The responsability for compliance is placed upon the individual, not a firm. S330 is the offence of failing to report.
There is no de-minimus limit on the perceived value of the crime to be reported. A £10 proceed is to be treated the same as a £10,000 proceeed. Tax evasion is given no special status as a crime and is to be treated the same as any other type of crime.
The ML Regulations are the UK’s secondary legislation in the AML/CFT regime. they where first introduced in 1993 and the 2007 Regulations are just the latest version.
The 2003 Regulations, effective 1 March 2004 bough the professional such as the accountant, estate agent or solicitor into the regulated sector. The Regulations are activity based so therefore does not discriminate between the qualified or the unqualified.
The Regulations are for firms to adopt policies and procedures to reduce the risk of money laundering taking place within their business. They are to help the individual fulfil their obligation to report suspicious activity under POCA.
The 2007 gives rise to compulsory registation and supervision for compliance for all firms in the regulated sector regardless of membership of professional associations.
The 2007 regulations also give rise to the “risk based” approach under which firms assess their risks according to a number of criteria and operate their polices and procedures according to that risk assessed and then demonstarte that to their supervisor.
World-Check exposes terrorists, financial criminals and disqualified directors in UK Companies House Register
World-Check, in partnership with data quality specialist Datanomic, recently embarked on a project to screen the UK’s Companies House register of companies, company directors and secretaries against World-Check’s global database of high risk individuals and organisations.
The underlying aim of the project was to identify the growing number of high risk individuals registering and operating businesses in the UK. Two articles appeared in The Times newspaper you can read them directly from the newspaper.
The first article entitled ‘4000 company directors listed as global terror suspects and fraudsters’ and the second one ‘Buckinghamshire firm run by Croation war crimes suspect Ivan Cermak’.
Financial Action Task Force (FATF) statement
Financial institutions in the UK should give special attention to business relations and transactions with persons, including companies and financial institutions, from jurisdictions that do not adequately apply the FATF Recommendations.
The FATF is an inter-governmental body that develops national and international policies to combat anti money laundering (AML) and the financing of terrorism (CFT). It has released a public statement on several countries highlighting their concerns over deficiencies in their AML/CFT legislation.
The countries are Iran, Pakistan, Uzbekistan, Turkmenistan, Sao Tome and Principe, and the northern part of Cyprus.
More information on FATF can be viewed on their website.
If you deal with any of the countries listed you should take account of these concerns in your AML Risk Assessment