The Consultative Committee of Accountancy Bodies (CCAB) have published the final version of their AML guidance for the accountancy sector following approval by the Treasury.
The Anti-Money Laundering and Counter-Terrorist Financing Guidance for the Accountancy Sector 2022 guidance include changes introduced from January 2020 by the EU's Fifth Anti-Money Laundering Directive (AML5) to the Money Laundering Regulations 2017 (MLR17).
This guidance covers the prevention of money laundering and the countering of terrorist financing. It is intended to be read by anyone who provides audit, accountancy, tax advisory, insolvency, or trust and company services in the UK and has been approved and adopted by the UK accountancy anti-money laundering supervisory bodies.
The CCAB guidance covers a number of proposed pragmatic interpretations in relation to AML5 and existing AML guidance.
The main changes in this final version include:
- The timeframe to report PSC discrepancies is reduced to 15 working days (previously 30 days).
- Strengthening from ‘should’ to ‘must’ for a shortlist of requirements.
- Update to the legislation referenced in the guidance following the UK leaving the EU.
- Clarified wording around enhanced due diligence for an occasional transaction where there are connections to a high-risk third country.
- The requirement for firms to report any discrepancies in the People with Significant Control register to Companies House. The updated guidance includes interpretations on timescales and exceptions for filing these reports.
- The requirement for firms to train ‘agents’ on Client Due Diligence (CDD) and how to identify and report suspicions of money laundering and terrorist financing. The updated guidance includes an interpretation of who should be considered as an agent for these purposes.
- The expansion of the scope of MLR17 to include the indirect provision of tax services.
- The requirement for enhanced due diligence to be conducted when a client is connected to a high-risk third country.
- Clarification that electronic Client Due Diligence systems may be considered a reliable method for CDD subject to meeting certain conditions.
Other changes include:
- Changes to bring the accountancy sector in line with other sectors.
- For example, the expansion of the ‘reasonable excuse’ defence for failing to make a Suspicious Activity Report to bring the sector in line with the legal sector.
- Changes to expand and enhance existing AML guidance.
- A new appendix of case studies on identifying beneficial owners for CDD covers a range of client types and structures.
- Updated guidance on identity verification for CDD purposes.
- An expanded list of red flags for money laundering and terrorist financing.
Following approval by HM Treasury and the issue of the final guidance by CCAB, we will update our suite of AML guides.
Useful guides on this topic
AML: Checklist incorporating AML 5
This checklist incorporates the changes made by Anti-Money Laundering Directive 5.
AML: Anti-Money Laundering Zone
Anti-Money Laundering (AML) Zone takes you to our supporting AML guides, checklists and articles.