Introduction to AML in the UK

Introduction to AML in the UK

Accountants in the UK are covered by the following anti-money laundering legislation,

• Proceeds of Crime Act 2002 ('PoCA');
• Terrorism Act 2000 (as amended);
• Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (S.I.692/2017) (‘The 2017 Regulations’)

The 2017 Regulations replace the Money Laundering Regulations 2007 and transpose, in the UK, Directive (EU) 2015/489 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing (the 4^th EU Anti-Money Laundering Directive)

The anti-money laundering legislation imposes requirements on 'relevant persons' including accountants, in relation to:

• Identification and record-keeping procedures;
• Reporting;
• Registration and supervision;
• Offences.

While many of the obligations imposed on practitioners have not been significantly altered by the introduction of the 2017 Regulations, there are some new developments arising from the 2017 Regulations including:

• Firms are now required to complete a whole firm risk assessment;
• Firms are now required to establish some specific internal controls in relation to anti-money laundering;
• There are changes to the requirements relating to customer due diligence which need careful attention;
• Domestic Politically Exposed Persons (PEPs) are to be subjected to prescribed due diligence processes. The Financial Conduct Authority has published guidance on the treatment of PEPs.

The reporting obligations on ‘relevant persons’ also extend to activities relating to terrorist funds, which include funds that are likely to be used for terrorism, as well as the proceeds of terrorism under the Terrorism Act, 2000 (as amended).

The Consultative Committee of Accountancy Bodies ('CCAB') has updated its Anti-Money Laundering Guidance ('AML') for the Accountancy Sector in the UK.  That guidance has been approved by Her Majesty’s Treasury (‘HMT’). That CCAB Guidance has been issued by Chartered Accountants Ireland as Technical Release 02/2018 and on CHARIOT/Institute Technical Content.  It is also available on the CCAB website.