Supervision

How are accountants supervised and what role does Chartered Accountants Ireland play?

Anti-money laundering legislation can be accessed on the Institute's Technical Hub legislation pages. AML legislation for Ireland and the UK can be found here.   

The legislation identifies “designated ” or "relevant" persons who must guard against their businesses being used for money laundering or terrorist financing purposes. Persons acting as an auditor, external accountant, tax adviser (which definition has recently been expanded) and/or trust or company service provider are designated persons and are, as such, subject to statutory AML obligations. They are sometimes referred to under the acronym DNFBP which means "Designated Non Financial Businesses and Professions". They are required to apply anti-money laundering measures in the course of their business.

The legislation also establishes supervisory bodies which monitor and secure compliance with legislative requirements. Chartered Accountants Ireland has AML supervisory responsibilities in Ireland as a Competent Authority pursuant to the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010.

Chartered Accountants Ireland has supervisory function as an AML supervisor in the United Kingdom  pursuant to the Money Laundering Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 as amended by the Money Laundering and Terrorist Financing (Amendment) Regulations 2019 (the MLRs). Chartered Accountants Ireland's UK supervised firms are primarily based in Northern Ireland.

The Professional Standards Department of Chartered Accountants Ireland performs this regulatory function on it's behalf. If you are a practising firm of Chartered Accountants Ireland, you are already subject to anti-money laundering supervision under Chartered Accountants Ireland's public practice regulations. The Institute’s Professional Standards Board (PSB) has recently (March 2022) published its 2021 Annual Report. The report describes the activities of the PSB and the Institute’s Professional Standards Department during 2021 including a focus on anti-money laundering supervision in Appendix E. The PSB Annual Report 2021 is available to read here.

In Ireland, the legislation requires other designated persons to come within the Institute's remit, registration is required and you will be supervised in accordance with the Money Laundering Supervision Regulations. An example is trust or company service providers (TCSPs).

More information is available from the Professional Standards Department area of the website. 

Where doubt exists regarding whether a member or firm should register with the Institute, please refer to the AML supervision guidance document for assistance.

There is an abundance of resources for members to better understand their obligations and to navigate the complexities of the effects of AML regime on them. Further links and references to useful materials are provided on these AML pages.

Appointing a money laundering reporting officer

In Ireland there is no legal requirement to appoint an MLRO  unless requested by the Competent Authority. However, where appropriate to the size, complexity and structure of an accountancy firm and in the light of the legal requirements imposed, the firm may find it beneficial to appoint an individual at management level or to appoint a member of senior management, a ‘money laundering reporting officer’ (“MLRO”) with responsibility for ensuring the firm’s compliance with the Irish anti-money laundering regime.

Under UK law there is a requirement under the MLR 2017 to appoint a nominated officer also known as a money laundering reporting officer or MLRO.

The role of the MLRO is not defined in legislation but has traditionally included responsibility for internal controls and risk management around money laundering and terrorist financing, in accordance with sectoral guidance. A firm may appoint a deputy to the MLRO.

The MLRO will generally:

• be familiar with AML legislation and regulation;
• monitor and manage compliance with AML legislation and regulation;
• have oversight of, and be involved in, AML risk assessments;
• create and maintain the business’s risk-based approach to preventing money laundering;
• create and maintain AML documentation;
• develop customer due diligence (CDD) policies and procedures;
• establish and maintain awareness and training; and
• receive internal suspicious transaction reports (STRs-ROI) and SARS (UK) .

Please also refer to the technical releases CCAB Anti-Money Laundering and Counter-Terrorist Financing Guidance for the Accountancy Sector 2022 (UK) (which replaces the draft guidance issued in September 2020 ) and CCAB-I Anti Money Laundering Guidance for members TR01/2019 (updated March 2022) for more information on the MLRO.

Also, although issued by the UK Financial Conduct Authority for firms authorised and registered by it, the FCA's  guidance published in January 2022 on competency and capability for heads of compliance and money laundering reporting officers (MLROs) may be of interest to readers. The FCA says it should help firms decide if an individual candidate is suitable. The guidance  is  based on FCA  experience of approved applications and gives details of what successful applicants had for example in the way of training and experience.

These pages are provided as resources and information only and nothing in these pages purports to provide professional advice or definitive legal interpretation(s) or opinion(s) on the applicable legislation or legal or other matters referred to in the pages. If the reader is in doubt on any matter in this complex area further legal or other advice must be obtained. While every reasonable care has been taken by the Institute in the preparation of these pages, we do not guarantee the accuracy or veracity of any resource, guidance, information or opinion, or the appropriateness, suitability or applicability of any practice or procedure contained therein. The Institute is not responsible for any errors or omissions or for the results obtained from the use of the resources or information contained in these pages.