Supervision

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

Introduction

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

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 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 Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2021 expanded the definition of tax advisor who is a designated person under existing legislation to include any other person whose principal business or professional activity is to provide, directly or by means of other persons to which that other person is related, material aid, assistance, or advice on tax matters. It also includes new ‘designated persons’ who will be required to apply specific criteria relating to anti money laundering in the course of their business. These include certain letting agents, virtual currency service providers and high-value art dealers.

Chartered Accountants Ireland as supervisor

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) publishes its report annually . The PSB reports describes the activities of the PSB and the Institute’s Professional Standards Department during the year with a section or appendix included which focuses on anti-money laundering supervision.

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.

Other AML supervisors

IRELAND 

The Central Bank of Ireland is the competent authority in Ireland which regulates and supervises  financial and credit institutions' compliance with anti-money laundering and countering the financing  of terrorism under the CJA 2010 (as amended) .CBI is empowered to take measures that are reasonably necessary to ensure that credit and financial institutions comply with the provisions of the CJA 2010 (as amended). Their website gives an overview of and provides an explanation of both what money laundering and terrorist financing is.

In 2019 the CBI published its Anti-Money Laundering and Countering the Financing of Terrorism Guidelines for the Financial Sector. It was updated in June 2021. The guidelines set out the expectations of the CBI in respect of credit and financial institutions' compliance with their AML/CFT obligations as set out in the 2010 Act and provide useful reference material. They incorporate expectations set out in previous Central Bank AML/CFT Sectoral Reports, AML/CFT Bulletins, and relevant European Supervisory Authority Guidelines.

In April 2024 the CBI issued its Expectations for Authorisation as a Payment Institution or Electronic Money Institution, or Registration as an Account Information Service Provider. On its pages CBI states its intent that there is clarity, transparency and predictability for applicant firms looking to be authorised/registered, while maintaining the high standards the public expects for regulated providers of financial services. It clarifies that the assessment process consists of three stages: an exploratory stage, an assessment stage and an authorisation/registration decision stage. Please also see within the Expectations for Authorisation Document the Anti-Money Laundering, Counter-Terrorist Financing and Financial Sanctions Pre-Authorisation Risk Evaluation Questionnaire which must be completed for Payment Institution and Electronic Money Institution Applicants.

Department of Justice (DOJ)

The Minister for Justice and Equality is designated as a Competent Authority for the purposes of securing compliance by certain categories of ‘designated persons’ with statutory requirements to prevent money laundering or terrorist financing.

The DOJ has established an Anti-Money Laundering Compliance Unit (AMLCU) to administer the functions of the competent authority under the CJA 2010 (as amended). Read here for further information on the compliance unit. High value goods dealers are “designated persons” under the remit of the Department of Justice. Also, authorisation from the Minister for Justice and Equality is required for Private Members Clubs  and certain  Trust or Company Service Providers to operate. (click to read the  subpage on Trust and Company Service Providers for information on TCSPs regulated by Chartered Accountants Ireland).Click here for the latest anti money laundering reports from the AMLCU which provides an account of the activities that the unit has carried out in performing its functions under the legislation  during the year to which the annual report relates.

On 28 March 2024, the Dept. Of Justice published Guidelines for Designated Persons supervised by its Anti-Money Laundering Compliance Unit (AMCLU). The purpose of the Guidelines is to assist those Designated Persons supervised by the AMLCU in understanding and meeting their Anti-Money Laundering and Countering the Financing of Terrorism obligations under the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 as amended and related Statutory Instruments. Please click here for a press release with some further details.

Department of Finance

While the Irish Department of Finance is not an anti-money laundering supervisor, it merits a reference in the AML context. It is a member of the Anti-Money Laundering Steering Committee (AMLSC), which was set up in 2003. This committee was established to facilitate the collaboration and coordination between national competent authorities, government departments and law enforcement authorities, to ensure the effective combatting of money laundering and terrorist financing.

UNITED KINGDOM 

There are 25 AML supervisors in the UK. Details are set out in the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (as amended) (“2017 Regulations”). In addition to the professional accountancy and legal bodies supervisors, there are three statutory supervisors, the Financial Conduct Authority, Commissioners for Her Majesty's Revenue and Customs and the Gambling Commission. The 2017 Regulations contain details of which bodies each supervises.

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.

Also ,while relating to credit or financial institutions, the June 2022 publication by the European Banking Authority (EBA) of its guidelines specifying the role and responsibilities of the anti-money laundering and countering the financing of terrorism (AML/CFT) compliance officer and of the management body of credit or financial institutions might be of interest to readers. You can read the EBA press release and guidance. 

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.