The new money laundering regulations revealed. By David Winch

Well done, Narninda.

Everybody loves you doing good appropriate things.

Keep up its good things jobs done.

Representatives of the ICPA have been involved in meetings and correspondence with HM Treasury for some months in an effort to establish the ICPA as a monitoring body for Money Laundering purposes.

Both the ICPA and HM Treasury had hoped to have finalised our deliberations before the issue of the recent draft but time was not on our side..

We believe that the ICPA can offer a "home" for those Accountants, Bookeepers etc. who are not members of the monitoring bodies specified in the draft recently issued rather that HMRC.

To this end we have commissioned and made available to all members our own regulatuions on how to deal with this matter.

We are in continuing negotiations with HM Treasury and hope that we can get this matter concluded as soon as possible.

More information is available from our website at www.icpa.org.uk and will be reported in the March Issue of "Accounting Practice" the ICPA magazine.

Tony Margaritelli : Chair ICPA

At long last we see the start of regulation of the unqualified accountant.

Perhaps I should have added that certain firms of accountants are currently monitored by the Financial Services Authority. That arrangement will continue.

There is an obvious risk that some firms might, at first glance, fall within the scope of monitoring by more than one regulator. It is proposed that the regulators work out a system of ensuring that, whilst every firm is monitored by somebody, no firms are monitored for money laundering compliance by more than one regulator.

David

I already got inform already, so got time to go and file name into recognised approved listed professional bodies.

Thank you Mr David Winch. You are important man on this area for discussion.

The choice of bodies approved for the purposes of monitoring under the Money Laundering Regulations 2007 will rest with the government on the basis of the criteria set out in the EU Third Money Laundering Directive.

The monitoring body must, for example, have power to compel the production of information relevant to its monitoring functions and adequate resources to undertake the monitoring.

Any body not already listed which believes that it should be recognised as a monitoring body should contact HM Treasury to pursue this.

David

Hi David

Generally I agree with your assessment, I do like the way Article 41 clearly states now the criminality of failure to comply rather than 'objective negligence' under S330 POCA 2002. Generally it is the sign of a clearer and easier to understand document.

I do have one concern, which you may or not share with me, that is the application of the fit and proper test to TCSP's. If you have your document to hand, Pg 23 2.82 includes in the activities for TCSP's "accountants providing TCSP services by way of business to third parties". Jump to Pg 29 No. 8 states

"Trust or company service provider means any person who by way of business provides any of the following services
(a) forming companies or other legal persons
(b) arranging for another person to act as-

(i) a director or a secretary of a company
(ii) as a partner of a partnership, or
(iii) in a similar position in relation to other legal persons

(c) providing a registered office, business, correspondance address etc

The government keeps putting a figure of 5,000 firms on these services.

As a company registration agent as one of my roles, my firm like the other 14 in The Association of Company Registration Agents (The top 15 in the UK) act for the professional in practice,not the general public directly. It is not us who arranges for the person to act but rather the professional we deal with, the work is only subcontracted to us. To our calculations that is going to affect over 10,000 firms of accountants who are not members of the bodies listed in the Regs. These will have to complete the fit and proper test with the commissioners and placed on the register.

To take that further it states 'arranging for another person to act as a partner of a partnership' now surely that has to catch the vast majority of the other 40,000 accounatnts who are not a member of one of the appropriate bodies.

Has the government got there sums wrong? Or in reality is it the implimenatation of a fit and proper test on the vast majority of unregulated accountants to the standards of those like you and me who are members of an appropriate body who have to by the very Charter and bye-laws they operate under require their members to declare that they are fit and proper.

Or is the government proposing legialation it appears to have no idea what the effect will be, like the 0% starting rate for CT?

No doubt other interesting things will arise out of this legislation.

Regards

Steve O'Neill
Business Tax Centre

Yes - it seems that the government has started the process to register the profession.
No doubt current and future members of ICAEW, ICAS,ICAI ,ACCA ,AAT, ATT and CIoT will be allowed to call themselves accountants and to practice as such, and no doubt other accountants who register direct with HMRC by a certain date will also be allowed to practice as accountants.
However I don't think it will be very long before the provision to register direct with HMRC rather than be a member of one of the 7 approved bodies listed above (and no doubt CIMA and CIPFA will also be included in the list) and to practice as an accountant will end.
This will achieve the registration of the term accountant.

David, it was mentioned in this thread that "The earlier consultation paper proposed that firms already subject to money laundering compliance monitoring by ICAEW, ICAS, ICAI or ACCA should continue to be monitored by those bodies...".

Would you, in your opinion think it fit and good too to include AIA into the list?

AIA stands for the Association of International Accountants, a RQB recognised by DTI on 11 July 1994 under CA 1989. Its website is www.aia.org.uk.

Jones, would you mind to pen a few words your opinion of including AIA into the list of "approved bodies" to be entitled to be called 'accountant'? I thought the AAT are just technicians in accounting and as such should not be in the list at all.

Thank You.

Steve

Firstly, as I understand it, there are no plans to amend section 330 (again!) so the test there will still apply. I generally feel that sections 327 - 342 PoCA 2002 'bite' on individuals (including employees) while, broadly speaking, MLRs place obligations upon organisations.

***

Reading your comment I thought at first that you were suggesting that your own firm is not subject to the "fit & proper" requirement (whereas I believe that as company registration agents you are). But perhaps I am getting the wrong end of the stick.

***

Do you remember the fuss about office cleaners and whether they fell within the 'regulated sector' when MLR 2003 came out? Government published a letter clarifying their understanding of what the MLR meant.

The paras 2.82 and 2.83 are, I think, an attempt to head off a similar problem in relation to MLR 2007.

My guess is that what the legislators are driving at when they refer to "arranging another person to act as" a director or partner is not the typical situation where, say, Mr & Mrs Client turn up at the accountant's office and say we want to start a business (either in partnership or through a company).

What I think they are driving at is firms who say "we know a bloke who lives in a tax haven who would be prepared to act as, say, a director of a company owned by you so that the company can be treated as resident in the tax haven". Most firms of accountants (whether qualified or not) do not offer that type of service and so (one would hope) will not be subject to the "fit & proper" test.

Note that para 2.83 indicates that "A person who is carrying out TCSP activity, but is not separately remunerated and does not separately hold himself or herself out as providing this business as it is carried out as an incident of the person’s business or profession" is not required to undergo the "fit & proper" test. I suggest the vast majority of accountants will avail themselves of this let-out.

The 'legal' justification might be that if an accountant does not 'hold himself out' as providing a service and (when he does provide it) does not bill for it separately, then he is not providing that service "by way of business".

David

Narninda, got report or no report to your body? No evidence show they reply your reporting?

Shame you saying that like reporting. Looks no report at all.