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Anti-money laundering regulations

Money laundering regulations apply to businesses that could be at risk to abuse through money laundering and terrorist financing. The accountancy sector is included in the field requiring regulation.

Please be aware that in the UK the Money Laundering and Terrorist Financing (Amendment) Regulations 2019 come into effect on 10th January 2020. These regulations implement the changes required by the 5th Money Laundering Directive (5MLD). Members must continue to meet the requirements of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations as well as the additional requirements of the 2019 amendments.

The main changes being that relevant persons must:

  1. take reasonable measures to understand the ownership and control structure of their customers. If the beneficial owner of a body corporate cannot be identified reasonable measures must be taken to verify the identity of senior managing officials.
  2. check that all persons with significant control have been filed on the Companies House register and report any discrepancies that are identified.
  3. confirm that electronic verification is a reliable source, provides sufficient assurance and is free from fraud.

Additionally, the definition of tax advisor has been extended to those offering indirect tax advice.  

Sector specific guidance will be issued soon to assist members in implementing the new requirements.
CIMA will also take into consideration the short lead-in time that businesses have had to prepare for the updated regulations when assessing current member compliance with those regulations.

Regulatory frameworks governing AML/CTF regimes in various countries

Global standards

The Financial Action Task Force (FATF) is the inter-governmental body which sets the international AML/CTF  legal, regulatory and operational standards through its 40 Recommendations.

European standards

The Fifth EU Money Laundering Directive has come into effect, replacing the Fourth Directive.

UK standards

Her Majesty’s Government has implemented the Fifth Money Laundering Directive (5MLD) through amendments to the Money Laundering Regulations 2017. The statutory instrument was laid in Parliament on 20 December 2019 and the legislation came into force on 10 January 2020, in line with the transposition deadline.

AML statutory instruments - full details

The CCAB guidance for the accountancy sector will be updated shortly. Members in Practice will be informed when this has been published. As always, this is the standard guidance document on how to understand your obligations and how to comply with them. For example you will need to review your Practice Risk Assessment. The Annual Return has been amended to take account of the relevant changes to the regulations. The Members' Handbook contains resources to assist you in meeting your obligations.

Republic of Ireland

The Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2018

Other useful links including:

Consultative Committee of Accountancy Bodies in Ireland (CCAB-I) (sector guidance for accountants)

Determining the correct AML/CTF supervision

 CIMA has signed an agreement with a number of other AML/CTF professional body supervisors in accordance with section 61 of the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 as amended. Dependent upon the status of professional body membership of the principles in your business, supervision for AML/CTF purpose may fall to another professional body.   

Principles refers to directors, partners and sole practitioners. So for example, if you were in partnership with a principle that holds membership other than CIMA, the practice may fall under the AML/CTF supervision of the other professional body. CIMA checks the information you provide in your annual return and will contact you if it believes you should be supervised for AML/CTF compliance by another body.

 

Authorisation for TCSPs

An agreement has been made between the Chartered Accountants Regulatory Board and the Anti-Money Laundering Compliance Unit of the Department of Justice and Equality in relation to the authorisation and monitoring of Trust or Company Service Providers (TCSPs). CIMA members offering core TCSP services may fall under this MoU. It concerns circumstances where a TCSP may need to be authorised and monitored by the Anti-Money Laundering Compliance Unit of the Department of Justice and Equality. Please indicate in your CIMA AML/CTF return if you offer TCSP services and if this is core or incidental to your business so we can assess your situation in relation to the MoU.

A copy of the MoU can be found here.

If you have any queries please contact aml@aicpa-cima.com

Channel Islands or Isle of Man

Members in the Channel Islands or Isle of Man are not subject to UK legislation, but must signify that they are aware of the legislation on AML passed by the States of the Bailiwick of Guernsey, the States of Jersey or Tynwald, as appropriate.

The Department for Home Affairs (DHA) provides legislation and guidance on anti-money laundering requirements for the Isle of Man.  Anti-Money Laundering and Countering the Financing of Terrorism Code 2015 

South Africa

Member in Practice rules oblige members to comply with UK money laundering regulations or the overseas equivalent. UK equivalent legislation includes:

Financial Intelligence Centre Act 2001 as amended by the Financial Intelligence Centre Amendment Act 2017

Money Laundering and terrorist financing control regulations

A booklet of all relevant legislation can be found here.

Appendix VI of the SAICA close corporations guide states that members of professional bodies including CIMA are recognised to perform the duties of an accounting officer.