The Consultative Committee of Accountancy Bodies (CCAB) has issued draft updated AML guidance for the accountancy sector which includes changes introduced from January 2020 by the EU's Fifth Anti-Money Laundering Directive (AML5) to the Money Laundering Regulations 2017 (MLR17).

The CCAB has included in their updated guidance a number of proposed pragmatic interpretations in relation to AML5 and existing AML guidance. This is awaiting approval by HM Treasury before it can be issued in final form.

AML5 

The main updates relate to:

  • 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 (subject to approval by HM Treasury).
  • 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 (subject to approval by HM Treasury).
  • 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

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 (subject to approval by HM Treasury).
  • Changes to expand and enhance existing AML guidance.
    • A new appendix of case studies on identifying beneficial owners for CDD which 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.

Links

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.

External link

CCAB draft updated AML Guidance for the Accountancy Sector

 

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