Money Laundering issues

Money Laundering issues

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My question relates to Money Laundering issues. In respect of change of appointment of accountants, what are the obligations of the outgoing and prospective accountants where:

a. The client has left to go to another accountant and you have received a letter from the prospective accountant asking the question as to whether there are any professional matters that would preclude him from acting and you intend to make a report to SOCA, or have already done so. Is there a conflict here with not tipping off?
b. You have received a ‘clearance letter’ from a prospective accountant where he specifically asks the following, ‘For the purpose of compliance with MLR please confirm, or otherwise advise, that from the work undertaken by you: There are no circumstances, of which you are aware, that give rise to any suspicion that money laundering may have occurred.’
c. You receive a reply from an incumbent accountant not addressing the MLR identity issue e.g., if I have asked the question as to how long they have known the client and the reply I get is ‘You should carry out your own MLR checks’!

What standard wording should be used in respect of MLR when writing to an incumbent accountant, or replying to a prospective accountant?

Simon

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David Winch
By David Winch
14th May 2009 18:29

Rule of thumb

Simon

There can be complex legal issues here, but as a rule of thumb I would NOT tell a successor accountant that you have made (or are about to make) a report to SOCA. If pressed on the point I would say something like, 'We never answer that question but we always comply with our legal obligations' and leave it at that.

If you want to ASK that question to a previous accountant that is up to you.

However, the position is different with regard to the problems you have encountered with the clients records or integrity or whatever. I would normally make full disclosure of the problems to a successor accountant (unless you thought they were dodgy themselves!) - I just would NOT say 'and we have reported it to SOCA'.

David

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Tony Margaritelli, ICPA Chairman
By Tony Margaritelli
15th May 2009 09:12

Money Laundering and Incoming/outgoing Accountant

Simon,

We at the ICPA advise our members that the simplest option to take is to undertake standard MLR checks on all new clients and not to request any information concerning MLR from the outgoing Accountant.

Regarding requests from incoming Accountants we suggest that a simple

"With regard to paragraph *** of your letter be advised that we do not respond to any matter raised regarding Money Laundering by any party. The identity or otherwise of the persons detailed in your letter are for you to establish and nothing we specify within this letter with regard to hand over information is to be construed as exonerating you from your responsibilities in this regard. Equally, we do respond to any requests regarding actual or suspected money laundering transgressions. Be advised further that our refusal to divulge any information with regard to these matters is not to be interpreted as either admission or denial that such transgressions have taken place."

Hope this helps.

Tony Margaritelli - Chair ICPA

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