AML review visit

Do supervisory bodies have the right to check our clients' bank statements during their visit?

Didn't find your answer?

Good morning, we have received today an email from our supervisory body for AML check visit. One of the things they have requested to check is our clients’ bank statements, and our business bank statements. We don't mind they check our bank statements;

But my question: do they have the right to check our clients' bank statements? And if, yes, should we ask our clients to give a consent? And, if our clients don’t want to give a consent, what should we do? Any help will be highly appreciated. 

Replies (20)

Please login or register to join the discussion.

avatar
By Wanderer
08th Mar 2024 10:22

Are you sure they are referring to 'client's bank statements' rather than 'client account bank statements'?

Thanks (11)
Replying to Wanderer:
avatar
By Paul Crowley
08th Mar 2024 10:37

Agree that they are asking about the Firm's client bank account, the one where the client's tax refund goes to.
A very likely place to look for clients passing money around.

Thanks (1)
Replying to Wanderer:
avatar
By Younis
08th Mar 2024 11:45

Thanks Wanderer for your remark. Accordingly, I have requested a clarification from them, and this is their reply "thank you for contacting us. We apologise for the misunderstanding in our earlier message. What we request is: access to your business bank account records and bank statements, including your client bank accounts".

Thanks (0)
Replying to Younis:
avatar
By Paul Crowley
08th Mar 2024 11:52

'client bank accounts' means the ones you hold for client monies given to you. Hence singular for the word client. You could have several bank accounts holding money that is not yours.
These would show your name but have the word 'Client' in the title.
It does not say clients' bank accounts. Plural would indicate those operated by all your clients

If you are still confused write a better email

As in, I will make available all the accounts held (in name of entity). I assume you are not asking me to provide bank details of accounts operated by my clients.

The email reply is I think clear, but could have been more explicit as not all practices operate a client account

Thanks (5)
avatar
By
08th Mar 2024 11:07

The real question is - are there any transactions in your client's bank statements that could present themselves as a red flag and, if so, what did you do about it?

Thanks (0)
Replying to John McCarthy:
the sea otter
By memyself-eye
08th Mar 2024 11:21

No, the real question is why is an an0nymous third party requesting confidential bank details from your clients.
if that IS the case, tell them to put their request where the sun don't shine.

Politely, of course.

Thanks (2)
Replying to memyself-eye:
avatar
By Paul Crowley
08th Mar 2024 11:48

Are they?
I suspect bad reading by OP. The client account belonging to OP seems fair game to me.
Is OP laundering for the benefit of his clients?, is not an unreasonable check to make of an entity that is regulated.

Thanks (0)
Replying to John McCarthy:
avatar
By Paul Crowley
08th Mar 2024 11:50

Nah
There are checking the firms client account, not clients' accounts.

Thanks (2)
David Winch
By David Winch
08th Mar 2024 11:14

It would be interesting to know which supervisory body this is and whether they are physically visiting your office or doing a (remote) desktop review?
David
P.S. I agree your own firm's client bank account is much more relevant that the bank statements of your clients' bank accounts.

Thanks (0)
Replying to davidwinch:
avatar
By Paul Crowley
08th Mar 2024 11:45

ICAEW combine AML with Practice assurance and audit reviews.
Always ask for client account details as ICAEW have rules about client accounts that need to be complied with.

Agree, knowing who is visiting is relevant.

Thanks (0)
Replying to Paul Crowley:
By Steve Holloway
08th Mar 2024 11:58

AAT have their practice compliance reviews conducted by the ICAEW and yes, my client (no s!) account was very much of interest to them. That sounds sinister .... my client account in general was something they wanted to see, not that it's contents were of much interest.

Thanks (0)
David Winch
By David Winch
08th Mar 2024 12:01

OK, so now it is clear they want the bank accounts operated by your firm - not those operated by your clients.
Make sure you have
1. Complied with your supervisory body's regulations relating to conduct of your firm's client bank account (including records, reconciliations, interest)
2. Your Firm-Wide AML Risk Assessment document is relevant to your firm (not just a regurgitated template) and has been reviewed & updated as appropriate
3. Same with your firm's AML Policies, Controls & Procedures document
4. You have training records for yourself and staff
5. You have fit & proper review forms for yourself & staff
6. (If ICAEW) you have DBS Basic Checks for the firm's BOOMs (the M refers to managers who have a role in AML compliance, not other managers for accounts teams)
7. You have adequate records of CDD for clients including KYC and AML risk assessments.
Good luck!
David

Thanks (2)
Replying to davidwinch:
the sea otter
By memyself-eye
08th Mar 2024 18:21

Jeez, no wonder I retired.
ps: when I was in practice I did NONE of these.

Thanks (3)
Replying to memyself-eye:
avatar
By FactChecker
08th Mar 2024 19:44

Careful ... don't want to test the statute of limitations if they start trying to track down the source of the monies that paid for the narrowboat! :=)

Thanks (3)
Replying to memyself-eye:
avatar
By Software Seeker
12th Mar 2024 11:26

memyself-eye wrote:

Jeez, no wonder I retired.
ps: when I was in practice I did NONE of these.

You must have retired a long time ago. Good for you; you don't have to deal with any of this stuff.

Thanks (0)
avatar
By adam.arca
09th Mar 2024 09:04

Agree with everyone else that the PB are interested in the firm’s client account. So why didn’t they just say that?

In fairness to the OP, if he is quoting verbatim in his post at 11:45, I can see the confusion: what the PB have said in their “clarification” is hardly a shining example of clarity.

It is common, albeit incorrect, English to simply tack an “s” onto the last word of a phrase and assume that makes a plural. So, “client bank account” is ambiguous in itself but would normally be read as the bank a/c belonging to the client. If you wanted to see the bank accounts for several clients, you should say “clients’ bank accounts” but are much more likely to say “client bank accounts.” That’s incorrect, forgivable in speech, but unforgivable in writing.

Thanks (1)
avatar
By Matrix
09th Mar 2024 09:59

They should have a record of whether you handle client money or not and make it clear that this is in reference to your handling of client money.

Thanks (0)
By Duggimon
12th Mar 2024 09:45

The only reason they would be asking for your clients' bank account statements rather than your client bank account statements is as a test to see if you're complying with GDPR because under no circumstances should you be showing those to a third party without good reason and explicit consent.

I highly doubt they would be doing this as a gotcha test though, agree with the others it's quite clear they're asking for statements for your firm's client account.

Thanks (0)
Replying to Duggimon:
paddle steamer
By DJKL
12th Mar 2024 11:35

That would surely be entrapment.

It is obviously the firm's client account or accounts, if more than one maintained ,to which they refer.

Thanks (0)
Avatar
By I'msorryIhaven'taclue
12th Mar 2024 12:29

Glad you resolved the bank account issue.
On a parallel tack, do your LofEs cater for compliance-related inspection of clients' records and their personal information content?

Thanks (0)