AML scrutiny tightens as new regulations take effect
Although the UK is set to leave the EU at the end of the month, that doesn’t stop the EU’s fifth money laundering directive from coming into force today.
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Well the money laundering might be costing billions a year, but does checking client ID of your make one ounce of difference to it?
Spending vast sums of money on complying with every more complex rules which don't stop the thing you are trying to tackle is rather futile.
So not only do we ahve to do all this mainly unpaid work but we then have to pay someone to stand over us and have the possibility of huge fines if we fail to comply with the waste of time regulations...
Has there been a study of the amount this all costs compared to how much it saves?
I'd rather they took all this money that's being spent on this and used it to pay for more detectives to investigate money laundering directly.
Perfect reason to drive all of the legitimate users of Crypto underground, in order to avoid the hassle.
Yeah, another great idea from the Useless Idiocracy...
Hi Ian
Police and Crime Commissioner Anthony Stansfeld states that a quarter of the fraud figure could be reduced by jailing just two bankers. He is currently trying to address the matter of global financial corruption and collusion in Parliament as he comments on the measley sums being put to tackle fraud. See his testimony on ITNJ https://www.youtube.com/watch?v=XRS-pum5ovA
All electronic ID checking means is a higher accountancy fee for the client. It would be a nonsense for most small business owners.
"Due diligence". A bit vague to start with. I would say most Accountants apply due diligence (we call it "common sense") in all their business dealings. Financial Institutions and solicitors are the kiddies that can't seem to get their heads around "common sense". I was actually asked by a solicitor (under due diligence) if I was the Sir John Jenkins, middle Eastern diplomat. Funnily enough he didn't ask me if I was the John Jenkins, the car dealer in our area.
Has anyone on this forum ever had an instance of a client using a false ID? That is the thing which MLRO seems obsessed with, but I have personally not seen a single case of it in 34 years of accountancy work. Think of all the time spent on ID checks by accountants on a problem that barely exists.
Would we as mere minions know the difference between a real one and a properly prepared bought and paid for, high end fake one? I bet your average 'due diligent' person wouldn't be able to tell the difference.
Roll on retirement.....
I'm pretty sure we wouldn't know the difference. However having a requirement to provide ID must act as a first line of defence against small-time criminals or would-be criminals who would otherwise be free to take on any identity they chose.
We should remember that the purpose of AML is to at least try to cut down the amount of financial crime and criminal activity generally, as that can only lead to a fairer society and a move away from a situation where organised crime gets out of control.
I'm no longer in practice on my own account and have little involvement with AML now, but it's always been clear to me that we should applaud all efforts to reduce crime.
Id "applaud the effort to reduce crime" if it was actually doing that.
The farcical ID checking does diddly squat.
What cuts down crime is fraud officers investigating and prosecuting frauds.
Whilst generally agreeing with the sentiments on this thread, I don't think officers investigating crime would help much compared to AML checks. Efforts at prevention might though, forcing ID checks is one way to make it more difficult to commit the crime in the first place/ drive up the costs for the criminal.
It's clear you have little to do with it these days by the tone of your response. If you had to deal with it and realise what we're doing has zero effect at great cost you might sing a different tune.
I'd applaud an effort to reduce crime. All this AML effort, time and expense could be much better spent on a few thousand more police detectives who would be much more effective at routing out criminals.
Like the ICO letters to property companies demanding £40 for nothing this is just another oblique means of taxation and keeping people employed in worthless jobs.
I cannot remember any report to the NCA etc. ever producing any response at all so it really is a huge waste of time and money.
Idiocracy just about sums it up.
@marlinman. I did suggest this be paid out of the proceeds that are collected from criminals but it fell on deaf ears. No doubt the treasury wants to spend it on its next daft idea
It certainly used to be the case that 50% of recovered monies went to HM Treasury, and the other 50% was split between prosecutors, investigators and courts. (Nothing for accountants, sorry!) Whether that is still the case I don't know.
David
Is there any specific guidance about what exactly we need to do? We already ID beneficial owners, ID online, have no trusts or crypto asset customers. I'm a bit confused about exactly how I'm supposed to change my systems/procedures
If you are satisfied that Enhanced Due Diligence is NOT required (see Reg 33 of 2017 Regs as amended by Reg5(4) of 2019 Regs), then I would suggest a careful reading of Reg 28 of MLR 2017
http://www.legislation.gov.uk/uksi/2017/692/regulation/28/made
and the amendments to it by Reg 5(2) of ML(Amendment)Regs 2019
http://www.legislation.gov.uk/uksi/2019/1511/regulation/5/made
and the new requirement under Reg5(3) of the 2019 Regs (inserting Reg 30A into the 2017 Regs).
David
Tell ICAEW re money laundering compliance, because in my experience they dont give two hoots.
Also what is the point in checking Companies House if Companies House dont make checks themselves?
In addition, all this hiding of information on Companies House, with the claim it is to protect the Companies, it could actually be protecting white collar crime. Transparency should be increased, not reduced.
The MLR supervisory work done by the professional bodies is now itself supervised by a separate body, OPBAS - the Office for Professional Body Anti-Money Laundering Supervision.
As for checking Companies House records which Companies House themselves do NOT check - is that perhaps the point?
David
Is that not the point being made though? Surely it would be far more effective to have Companies House make checks on directors/shareholders perhaps even using the same verify system used by .gov.
Any cost in doing so could easily be re-charged onto the £12 fee currently levied which may also then go some way to discouraging disposal Ltd Cos.
I think it would be fair to point out that if, hypothetically, my next door neighbour wished to engage in financial crime she could incorporate a company through Companies House and use it for nefarious purposes without involving any professional adviser. So having professional advisers check their clients' particulars would not prevent that.
David
Yes you could buy any number of companies. Use one for crime while the others are dormant and so on. As long as you do it for a year or so, no problems. You could tell the bank anything that involves a cash based business. If you didn't get too greedy you could go on ad infinitum.
Please write to your MP's and ask them to support Anthony Stansfeld's actions in improving police levels to tackle fraud. Here is his testimony on his experience of financial and judicial corruption. He is speaking to parliament at the moment, so our MP's support will be helpful. https://www.youtube.com/watch?v=XRS-pum5ovA
It is true to say that police resources are very limited and that violent crimes, sex crimes & drug crimes are more in the public eye (and investigation of them more appropriately funded) than fraud & financial crimes.
Also the investigation of financial crime requires police officers with skills & experience - developing which involve spending money and time.
But don't forget that it is not only the police investigation that needs funding. The CPS and courts need funding and - if there is to be a fair trial - the defence also needs funding.
That means Legal Aid - as many persons accused of financial crimes will have their own funds frozen. The law expressly does NOT permit a person's frozen funds to be used to pay his defence costs (s41(4) PoCA 2002).
Government funding for the Ministry of Justice has been cut by about 40% over the last 10 years or so.
Legal Aid rates for expert witnesses (such as myself) were cut by 20% in 2013 and have not changed since then.
All of these issues need to be addressed if fraud and financial crime are to be tackled sensibly.
(I'll get off my soapbox now!)
David
Great isn't it. We can send people to Mars. We can make someone walk again with brain technology, etc. etc. Yet we can't stop someone sitting on a beach somewhere with a laptop money laundering thousands if not millions of £'s. Priceless.
Interesting points and as usual the best comes from David Wynch - politicians take note.
Part of the problem as I see it is that practioners are monitored ny desk jockeys who never have been a practioner. In my view this means that they are looking at the problem from a different angle. To help us all be better at it and help provent money laundering activity we need practioners to help us.
I have just endeavoured to submit a SAR. This process needs to be more user friendly and work properly. Like many readers I submit few SARs so it is a process that I have to relearn each time. It would also be helpful if when one clicks the save button that it worked.