Tax & Accounting Blog

On Compliance – Anti-money laundering

Accountancy Practices, Accounting, Compliance September 20, 2018

This month’s podcast focuses on the anti-money laundering, and how accountants have dealt with this changing regulation so far. The 2017 fourth anti-money laundering directive came into force last summer, and the deadline to get everything sorted passed by on 26 June of this year. Richard Hattersley is joined by David Winch and Richard Simms to discuss what the recent regulation changes mean, as well as the issue of transparency.

Richard sets the scene by comparing the changes to those of the 2007 regulations, and is positive in his view that there isn’t too much for accountants to do if they were on top of it the last time the rules changed: “If you felt you were compliant with the 2007 regulation, then the updates to the 2017 regulating will not have been that huge”. He describes AML compliance as “achievable“, and “not a long way away from where we were in the first place.” Although he considers time to be the biggest barrier to implementing any necessary changes to comply, he believes the new rules are “there for good reason…a good social reason – good social responsibility.”

He emphasises that since the 2007 regulations, there is more focus on each accountancy practice having a strong AML policy. However, he does worry that some accountants perhaps do not take the new AML regulations as seriously as they should do.

David Winch then looks specifically at the 4th EU directive and explains why these changes will be important to accountants: “there may now be a little bit more keenness from the supervisory bodies to come and check up on us accountant in practice to make sure we’re doing it right”.

He expresses concern over those accountants who have not reacted to the new regulations: “There will be some accountants who do nothing at all about compliance, nothing at all about checking ID and so on. If that’s your situation, you really should sort something out and get a system in place sooner rather than later, because one of these days there will be a check on you and you will be in hot water if you’ve done nothing at all.”

David picks up on one part of the regulation in particular: “One change that hasn’t received a lot of publicity but that is actually, in a way helpful to accountants, is that now there will be a need for anybody that is in practice as an accountant…there is a need for them to indicate that they have no serious criminal convictions. Anybody that does have a serious criminal conviction for tax fraud, for example, won’t be able to continue running an accountancy practice under the 2017 regulations.” He views this element of the regulation as being a positive factor but recognises that many accountants are unaware of this specific element.

The pair wrap up by discussing the cost element of compliance, and whether the efforts put into complying with AML is consistent across all accounting firms. They both agree that while some firms make an effort, it seems unfair that many seem oblivious.

 What else is in this episode?  

  • What the big changes are in the new regulation
  • Examples of how these changes could trip up accountants
  • The likely problems accountants may find themselves in should they not comply
  • Some of the high-risk scenarios accountants could encounter
  • Whether OPBAS will mean increased fees for accountants
  • Whether Brexit have any implications for AML

Listen to the conversation in full by clicking the arrow below:

If you found this podcast useful, you might also enjoy hearing about good risk management in an accountancy firm.

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