Anti-money laundering guidance for the accountancy sector
New CCAB guidance and comment from ACCA on Regulation 26 and ‘fit and proper’.
CCAB (The Consultative Committee of Accounting Bodies) has published new guidance for all entities providing audit, accountancy, tax advisory, insolvency or related services such as trust and company services, by way of business.
The guidance has been updated for the 2017 Anti-Money Laundering (AML) Regulations and is approved by HM Treasury. It has also been adopted by the UK accountancy AML supervisory bodies. The guidance covers the prevention of money laundering and the countering of terrorist financing.
Regulation 26 and ‘fit and proper’
Regulation 26 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (the MLRs) sets out the responsibilities of ‘relevant firms’ and supervisory authorities to ensure that no individual may be a beneficial owner, officer or manager (BOOM) of a relevant firm (which would include an accountancy firm), unless:
he or she has been approved as such by the relevant supervisory authority, and approval by the supervisory authority has not ceased to be valid; and
the individual has not been convicted of a relevant offence (as set out in Schedule 3 of MLRs).
The Treasury has stated it believes ‘BOOMs’ in relevant firms should be required to undergo ‘criminal record checks’.
ACCA believes that Regulation 26(7) does not prescribe criminality checks. Nor does it believe that criminality checks are the most effective means of achieving the required outcome.
Clearly, ACCA practising certificate holders, as part of their declaration, state that they are a fit and proper person. Accountancy firms also check on the fit and proper status of staff and contractors with many using the ACCA ‘fit and proper’ forms.
ACCA is of the opinion that firms need to have appropriate procedures to ensure individuals are ‘fit and proper’ but is unconvinced on the position of the Treasury for all firms being required to undertake checks. Clarification from the Treasury is being sought.