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Accountancy regulators get tough on AML compliance

24th May 2019
Hand knocking on the door

Accountancy regulatory bodies intensified their usual money laundering activity last week, identifying 42 businesses as having potential compliance failings.

Brought together by the National Economic Crime Centre, accountancy regulators such as HMRC, ACCA ICAEW and the ICB along with their solicitors and law equivalents carried out a total of 250 visits and compliance reviews.

The regulators exposed failings in customer checks, record keeping and identifying risk with the 42 potential uncompliant businesses.

The regulators are set to follow up with assessments or disciplinary action in some cases where the businesses' supervisory systems were found not up to scratch. 

The NECC is not lifting its foot off the accelerator now the week has gone. The regulators are continuing to analyse the visit reports to identify any further breaches.

With money laundering costing the UK more than £100bn pounds a year, Rick Kent of the NECC emphasised the importance of this united regulatory front.

“As outlined in the NCA’s national strategic assessment launched earlier this week, regulators and supervisors are vital to our work to stop those who undermine the UK’s economy, integrity, infrastructure and institutions through their criminality.

“Virtually all high-end money laundering schemes, and several cash based ones, are facilitated by the abuse of legitimate processes and services. This work with regulators helps protect victims, organisations and systems from the harms of serious and organised crime.

“The particular aim of the week has been to further strengthen our co-ordinated approach. The NECC is able to unite organisations to make the UK a hostile environment for money laundering.”

While this co-ordinated week-long AML strike was organised by the NECC to send a united message of the regulators working together to identify and deal with any suspicious or criminal activity, the increased activity may be a sign of things to come.

Accountancy bodies are currently under mounting pressure to enforce a tougher stance towards AML enforcement following an excoriating report by the Office of Professional Body Anti Money Laundering Supervision (OPBAS) – who is effectively the supervisors of the supervisors.

And while SARs reports increased across the board in 2017-18, recent research has found that accountants still lag behind other professions as a third of accountants did not submit a SAR last year.

Accountants in practice, therefore, are expecting to feel the brunt of any robust supervision in response to this.

Although HMRC is not supervised by OPBAS, that hasn’t stopped the tax authority from scaling back on its money laundering clampdown. Last year the department’s fines for AML non-compliance soared by 91% to £2.3m.

As part of the week-long compliance activity HMRC reiterated that money laundering regulations should not be ignored. 

“Businesses in the accountancy, legal and property sectors need to understand that criminals prey on weaknesses, so it’s vital they take all steps to protect themselves,” said HMRC’s director of fraud service Simon York. 

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