Changes to AML regulations: practitioners must act now
Changes to anti-money laundering regulations mean that relevant firms and sole practitioners must comply with new requirements before 26 June 2018.
Changes to anti-money laundering (AML) regulations mean that relevant firms and sole practitioners must comply with the following requirements before 26 June 2018.
To achieve this, ACCA will send a communication to all practitioners before the end of May including an electronic form to provide the required information. Relevant firms and sole practitioners should start taking all the necessary steps to obtain this information and not wait for ACCA forms to arrive. Information is required to cover the following two areas:
Under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (the MLRs) all relevant persons acting as Trust or Company Service Providers (TCSPs) must be registered with HM Revenue and Customs (HMRC). HMRC has asked Professional Body Supervisors to provide a list of their supervised relevant persons that act as TCSPs before 26 June 2018. As part of the 2018 practising certificate (PC) annual renewal ACCA asked PC holders to confirm whether their firms provide any services that fall within the definition of a TCSP. Due to the low response rate and the importance of this regulatory requirement, we are asking all ACCA practitioners to include in the form details of all businesses providing TCSP services, whether or not previously notified to ACCA.
Please consider that practitioners providing accountancy services which fall outside the meaning of public practice (for example book-keeping or TCSP services) may not have previously registered their businesses providing these services with ACCA but will, nevertheless, be subject to supervision. Practitioners must ensure that details of these businesses are included in the form.
The MLRs require that all beneficial owners, officers and managers (BOOMs) of relevant firms must be approved by the relevant supervisory authority. This also includes sole practitioners and any officers and managers working for them. To comply with this requirement, relevant firms and sole practitionersmust submit an application including all BOOMs before 26 June 2018. Once the application has been submitted ACCA can process the application after 26 June 2018. As ACCA already has the details of existing practitioners, applications should only include individuals who don’t currently hold an ACCA PC. Details must include the full name of the individual BOOM, the role/title and confirmation that the BOOM is fit and proper.
It is the relevant firm and sole practitioner’s responsibility to ensure that only fit and proper individuals who have not been convicted of a relevant offence are submitted for approval as BOOMs. To ensure that all forms are adequately submitted by 26 June 2018, relevant firms and sole practitioners should not wait for the application forms to be sent by ACCA and start taking any necessary steps to ensure that their BOOMs are fit and proper and have not been convicted of any relevant offence.
We have formally communicated to OPBAS our approach to complying with Regulation 26 of the MLRs, Extracts of the communication are included below.
‘We assume that HM Treasury’s intention is that proportionate and effective measures are taken to address the risk that individuals with relevant criminal convictions will hold positions as BOOMs within firms, which might, in turn, increase the ML/TF risk assessment of such firms.’
‘HM Treasury states that “law enforcement agencies report that the new requirement in the MLRs to check key personnel for relevant criminal convictions will further strengthen compliance and mitigate risks in the accountancy and legal sectors”. Not only does this make assumptions concerning risk (which cannot be applied across the whole of the accountancy sector or the legal sector), but it is incorrect in referring to a requirement in the MLRs to check key personnel for relevant criminal convictions”. There is, of course, no such requirement.’
‘Discussions among AAG members indicate that some PBSs are prepared to require all BOOMs within their firms to be subject to criminality checks. For other PBSs, criminality checks will only be required based on a risk assessment and this demonstrates an approach consistent with the AAG risk matrix and in the spirit of the 2017 Regulations. ACCA will undertake criminality checks on a sample basis following a risk based approach.’
“It is reasonable to gain a level of assurance that newly identified BOOMs are fit and proper, and have not been convicted of any relevant offences. Having gathered that data, it would be reasonable to require a sample of firms (on a risk basis) to obtain criminality checks, which would all be reviewed by ACCA. This approach is preferable to one that requires all firms to obtain criminality checks, even though only a sample will be reviewed by ACCA.’
Forms must be completed electronically to ensure that information is processed accurately and timely to meet the legal requirements under the mandated timescales. The completion of electronic forms will allow us to acknowledge receipt of applications promptly for the benefit of your AML records. Only under exceptional circumstances will submissions using paper forms be permitted. If electronic submission will present you with difficulties, you should contact ACCA as soon as possible using the email address: AML@accaglobal.com