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ML Regulations 2007

ML Regulations 2007

Didn't find your answer?

The ML regulations 2007 were laid before Parliament 25 July, for the accountancy service sector the question was always going to be monitoring, who is in and who is out?. here is your answer, this is extracted straight from the regulations and list the professional bodies who will monitor their members.


1. Association of Chartered Certified Accountants
2. Council for Licensed Conveyancers
3. Faculty of Advocates
4. General Council of the Bar
5. General Council of the Bar of Northern Ireland
6. Institute of Chartered Accountants in England and Wales
7. Institute of Chartered Accountants in Ireland
8. Institute of Chartered Accountants of Scotland
9. Law Society
10. Law Society of Scotland
11. Law Society of Northern Ireland

12. Association of Accounting Technicians
13. Association of International Accountants
14. Association of Taxation Technicians
15. Chartered Institute of Management Accountants
16. Chartered Institute of Public Finance and Accountancy
17. Chartered Institute of Taxation
18. Faculty Office of the Archbishop of Canterbury
19. Insolvency Practitioners Association
20. Institute of Certified Bookkeepers
21. Institute of Financial Accountants

The two part list is interesting. All those in part one can be relied on for 3rd party reliance for CDD, those in part 2 cannot. Once again even in monitoring we have a two tier accountancy market. It seems strange that an organisation can be deemed competant to monitor its members but its members are not competant enough to be relied upon to fulfil the CDD to a level that others may rely upon it!

If you where wondering like we were what the H*** the Archbishop of Canterbury has to do with accountancy, the answer is nothing. The faculty office since they took the duties off the Pope in 1533 has been responsible for the regulations of eccumenical notories who are also under the ML Regulations.

Do not forget everybody else has HM Customs as their monitoring body.

Good Luck one and all!

Steve O'Neill
Business Tax Centre Limited
Stephen O'Neill

Replies (5)

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By steveoneill
31st Jul 2007 10:55

The ML Regs are finger lickin' good?
Hi David

Thanks for supplying the explanation, I've been busy the past few days. However, my family do find a bargain bucket of KYC occassionally quite good.

I would just like to exapnd your comment though of customer due diligence replacing the know your client concept. I would suggest that the CDD concept embraces KYC and has the KYC concept very much at its core, and then enhances the basic concept, including more onerous measures such as risk assessment, enhaced verification etc including as you quite rightly put it, "all clients", including those pre 1 March 2004

I actually quite like these regulations and believe that over a period of time they will actually help the accountancy sector as a whole, though in the shorter term some firms will struggle to adopt a "compliance culture"

Since we are supposed to be compliant with these Regs by 15 Dec 2007 we have already arranged a series of seminars around the UK before the commencement date, these range from Glasgow to Southampton, visit for details, hopefully accountingweb will not be too mad at me for this blatent advertising since one of the events is the Accountingweb Practice Conference at Ascot 1 November 2007, where we are giving a joint presentation with SOCA on the risks firms face from money laundering.

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By Anonymous
31st Jul 2007 14:18


Thank you for your comments.

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David Winch
By David Winch
31st Jul 2007 11:51



I would agree that CDD in a marketing world might be branded as "KYC plus"!

I notice that in the final Regulations the ongoing monitoring has been slightly separated from CDD - supposedly to add clarity. So whilst I originally was going to say that CDD included ongoing monitoring I thought I would avoid putting it that way.

There may be rare occasions when less compliance work is required under the new Regulations than the old - for example where the client is a local authority or where the accountant accepts "passported" information from another person in the regulated sector. But, apart from that, I think the new Regulations will require everything previously required under the 2003 Regulations, plus something on top. So "KYC plus" would not be too much of a misnomer.

Like you, I have done some work with AWEB, appearing 'in the flesh' as well as in print on the net, and I do think AWEB has shown itself to be a leader in the provision of information about money laundering risks for accountants in practice.

Well done AWEB - and keep it up!


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By Anonymous
30th Jul 2007 11:47

Parts 1 & 2

Hi Steve,

Sorry to be dense, but what are the implications for the difference between parts 1 & 2? Will those in part 2 be monitored by HMRC?

I'm not sure what you mean by "All those in part one can be relied on for 3rd party reliance for CDD, those in part 2 cannot"

Also, what does CDD stand for?

Also, is there any reason why ACCA & ICAEW/I/S are treated differently from CIMA/CIPFA? After all, they're all CCAB bodies. Is it audit?

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David Winch
By David Winch
30th Jul 2007 14:31

I know what you mean . . .


I always used to think KYC was that singularly revolting battered chicken fast food outlet.

Anyway, CDD is replacing KYC and the point of parts 1 & 2 is for passporting. All clear now?


CDD is "customer due diligence" or "client due diligence". It has replaced the concept of "know your customer" (KYC) in relation of anti-money laundering procedures. It involves the application of a risk-sensitive basis to money laundering issues including the confirmation of the identity of new and existing clients (and their beneficial owners, i.e. persons owning more than 25% of an entity) and obtaining information on the purpose and intended nature of the business relationship. It goes hand in hand with the subsequent ongoing monitoring of their transactions (again on a risk-sensitive basis) and the keeping up to date of information.

"Passporting" allows you, in certain circumstances, to accept confirmation of a client's identity from another person who is also subject to the Money Laundering Regulations - but the ultimate responsibility remains with you.

I hope that helps a bit.

Neither part 1 accountants nor part 2 accountants will be monitored by HMR&C, they will be monitored by the body of which they are a member. But HMR&C will monitor accountants and tax advisers (offering a service to the public) who are neither part 1 nor part 2 'qualified'.

It has nothing to do with audit, but it is to do with designated professional bodies for investment business purposes under the Financial Services and Markets Act 2000. The part 1 bodies have a longer pedigree of self-regulation under the FSMA. Apparently for that reason the authorities think that an assurance from a Part 1 person can be trusted for "passporting" but an assurance from a Part 2 person cannot.

We are planning training seminars in February for accountants. Although the MLR 2007 will come into force in December we rather think few accountants will want to take time off for training before 31 January! (But if you do then email me and we can sort something out for you.)

[email protected]

P.S. You can access a copy of the new Regulations here.

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