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Criminality test

The Money Laundering Regulations 2017 have introduced a criminality test. All existing UK MiPs and new UK MiP applicants who are supervised for AML/CTF by CIMA will have to satisfy the regulation 26 test.

What is the criminality test?

Regulation 26 has introduced a criminality test. It applies to a range of regulated persons, including external accountants.

This means all existing UK MiPs and new UK MiP applicants who are supervised for AML/CTF by CIMA will have to satisfy regulation 26.

It is satisfied by the person in question demonstrating they do not have any unspent convictions for the offences set out in Schedule 3 of the Regulations.

Who needs to satisfy the regulation 26 test?

UK MiPs supervised for AML/CTF by CIMA - existing UK MiPs and new UK MiP applicants who are supervised for AML/CTF by CIMA will need to satisfy regulation 26 with CIMA.

UK MiPs supervised for AML/CTF by another AML/CTF supervisor - existing UK MiPs and new UK MiP applicants who are supervised by another supervisor will satisfy regulation 26 with their own supervisor.

Beneficial owners, officers and managers - regulation 26 will also have to be satisfied by other persons at a UK MiP’s practice that meet the definition of beneficial owners, officers or managers (please see more information on these definitions below). These persons will satisfy regulation 26 with their own AML/CTF supervisor. If they are not providing regulated services and do not have an AML/CTF supervisor then they will need to satisfy regulation 26 with CIMA (this is for compliance assurance purposes only; CIMA will not supervise or regulate those persons – CIMA AML/CTF supervision extends only to individual CIMA members).

What is a beneficial owner, officer and manager?

The persons that may commonly fall within these definitions are given below. Please note that persons can meet these definitions even if they are not providing accounting services.

Beneficial owners - this includes a person who owns or controls more than 25% of the shares or voting rights of a company. However, please see regulation 5 and regulation 6 for the full definition.

Officers - this includes a director or secretary of a company, or a partner in a partnership. However, please see regulation 3 for the full definition.

Managers - this is the MLRO of the practice.

How is regulation 26 satisfied?

HM Treasury has informed supervisors that satisfying regulation 26 needs to be evidence-based and that the most appropriate evidence is the basic disclosure (as this only displays any unspent convictions).

Therefore a person who has a basic disclosure that does not list any unspent convictions for the offences set out in Schedule 3 will satisfy regulation 26.

Each person that needs to satisfy regulation 26 will need to obtain a basic disclosure. MiPs will be asked to upload their basic disclosure when completing the AML/CTF return.

Other persons at a MiP’s practice that have to satisfy regulation 26 with CIMA (please see "Who needs to satisfy the regulation 26 test?", above) will need to send their basic disclosure by email to aml@aicpa-cima.com, giving the MiP’s Contact ID and name of their practice as their reference.

How is the basic disclosure obtained?

The governmental body you will need to obtain your disclosure from will depend on your location. Please see the section below that applies to you.

Persons in England and Wales

You should apply to the Disclosure and Barring Service for a basic certificate. Once your certificate has been issued, the DBS service will allow you to give consent to a third party to view it. You should give consent for CIMA to view your certificate as a third party who does not have a DBS online account.

Should you be asked to provide a name and organisation for the third party, please enter Professional Standards and CIMA. CIMA will view your disclosure using the consent you provided. This means you will not need to send to us a scan/image of your certificate. However, you will need to send the consent code and your certificate number to aml@aicpa-cima.com so we can view it.

Persons in Scotland

You should apply to Disclosure Scotland for a basic disclosure.

Persons in Northern Ireland

You should apply to AccessNI for a basic disclosure.

What action do I need to take now?

The bodies from which disclosures are obtained state that most applications are processed within 14 days. You should therefore apply for your disclosure in advance so you have it ready to submit as part of your application (or if you are renewing, so it is ready for the renewal deadline).

Similarly, other persons at your practice that need to satisfy regulation 26 with CIMA (please see "Who needs to satisfy the regulation 26 test?", above) should also apply to obtain their basic disclosure, as your application or renewal cannot be approved unless they also satisfy regulation 26.

I already have a basic disclosure. Can I use this to satisfy regulation 26?

HM Treasury has informed supervisors that the basic disclosure must have been obtained within the last 3 months from the date of submission.

If you already have a basic disclosure dated within the last 3 months then you can use this and you do not need to obtain an updated disclosure. If your disclosure is more than 3 months old then we will be unable to accept it.

I have already satisfied regulation 26 when I applied to be a MiP earlier this year. Do I need to satisfy it again?

No, if you satisfied regulation 26 earlier this year when you applied to become a MiP then you will not need to satisfy the check again.

Other persons at my practice who need to satisfy regulation 26 have already done so with their own supervisor. Do they need to satisfy it again with CIMA?

No, a person satisfies regulation 26 with their own AML/CTF supervisor (please see "Who needs to satisfy the regulation 26 test?", above).

I have an unspent conviction for one of the offences in Schedule 3. What will happen to my application?

Regulation 26 prohibits supervisors from approving an application where the person has an unspent conviction for an offence set out in Schedule 3. You will therefore be unable to become a MiP or renew as a MiP.

There is no right of appeal under the Regulations, although a person can re-apply once their conviction becomes spent.

If you have any questions on this matter please contact aml@aicpa-cima.com.

What will CIMA do with the basic disclosure?

We are aware that the disclosures contain sensitive information and they will be processed and stored in line with current data protection legislation.