by John McCarthy Consulting Ltd. | Jul 24, 2022 | Blog, News
According to the Financial Action Task Force (FATF) the definition of a Trust and Company Service Providers (TCSP) is a business, that provides any of the following services to third parties:
- Acting as a formation agent of legal persons Acting as (or arranging for another person to act as) a director or secretary of a company, a partner of a partnership, or a similar position in relation to other legal persons;
- Providing a registered office; business address or accommodation, correspondence or administrative address for a company, a partnership or any other legal person or arrangement;
- Acting as (or arranging for another person to act as) a trustee of an express trust or performing the equivalent function for another form of legal arrangement;
- Acting as (or arranging for another person to act as) a nominee shareholder for another person.[1]
The above FATF definition of a ‘TCSP’ excludes providers of TCSP services within financial institutions, law firms, notaries, other independent legal professionals and accountants, who will be separately regulated within their own professions.
The Criminal Justice (Money Laundering and Terrorist Financing) Acts 2010 to 2021 (the Act), requires TCSPs to help prevent money laundering or terrorist financing and register as designated persons with the AML Compliance Unit of the Department of Justice. They must also apply Customer Due Diligence (CDD) to all their transactions including the retention of certain customer identity documents, verify client data with the RBO register, maintain an AML Policies & Procedures Manual and provide staff with regular AML training.
There are currently around 380 TCSPs registered with the Department of Justice AML Compliance Unit and the latest list of registered TCSPs as of June 2022 may be viewed here.
[1] FATF ‘Guidance For A Risk-Based Approach for Trust and Company Service Providers’ (June 2019)
Are your AML Policies Controls & Procedures up to date?
We have just released our latest Anti-Money Laundering Policies Controls & Procedures Manual (March 2022) – View the Table of Contents click here.
We have also just released an updated AML webinar (March 2022) available here, which accompanies the AML Manual. It explains the current legal AML reporting position for accountancy firms.
To ensure your letters of engagement and similar templates are up to date visit our site here where immediate downloads are available in Word format. A bulk discount is available for orders of five or more items if bought together.
For our latest Audit Quality Control Manual (October 2021) (implementing the latest Irish Audit & Accounting Supervisory Authority standards including ISQC1 on audit quality control) click here. View the Table of Contents here.
by John McCarthy Consulting Ltd. | Jul 13, 2022 | Blog, News
High Value Goods Dealers (HVGDs) are businesses involved in the sale of goods of high value where the trader accepts cash payments of €10,000 (the current ‘high value’ threshold) either in one transaction or a series of linked transactions. Examples of these businesses include jewellers, antique dealers, boat and car sales and dealers in precious stones.
The Criminal Justice (Money Laundering and Terrorist Financing) Acts 2010 to 2021 (the Act), place legal obligations on HVGDs to help prevent money laundering or terrorist financing.
HVGDs could be used to conceal the proceeds of criminal activity or for the purpose of evading tax. Under the Act, a HVGD is referred to as a ‘designated person’. A designated person is obliged to guard against their business being used for money laundering or terrorist financing purposes.
HVGDs must register as designated persons with the AML Compliance Unit of the Department of Justice and must also apply Customer Due Diligence (CDD) to all cash transactions of €10,000 including the retention of certain customer identity documents, have an AML Policies & Procedures Manual and provide staff with regular AML training.
Are your AML Policies Controls & Procedures up to date?
We have just released our latest Anti-Money Laundering Policies Controls & Procedures Manual (March 2022) – View the Table of Contents click here.
We have also just released an updated AML webinar (March 2022) available here, which accompanies the AML Manual. It explains the current legal AML reporting position for accountancy firms.
To ensure your letters of engagement and similar templates are up to date visit our site here where immediate downloads are available in Word format. A bulk discount is available for orders of five or more items if bought together.
For our latest Audit Quality Control Manual (October 2021) (implementing the latest Irish Audit & Accounting Supervisory Authority standards including ISQC1 on audit quality control) click here. View the Table of Contents here.
by John McCarthy Consulting Ltd. | Jul 1, 2022 | Blog, News
Question from a firm – During the audit of a waste disposal company it has been drawn to my attention by the Audit Senior that the company has not renewed its waste disposal licence which is not a material amount. Is this something that we need to act upon?
Answer – ‘Money laundering’ is defined very widely in Section 7 of the 2010 Act (the Criminal Justice (Money Laundering and Terrorist Financing) Acts 2010 to 2021). It includes all forms of
- Handling;
- Disguising;
- Layering;
- Transferring; or
- Possessing
the proceeds of criminal conduct. i.e. for the matter to be money laundering there must be two elements:
- ‘criminal conduct’ and also
- ‘proceeds of criminal conduct’.
The ‘proceeds of criminal conduct’ is defined in Section 6 of the 2010 Act and means any property that is derived from or obtained through criminal conduct, whether directly or indirectly, or in whole or in part…’. Proceeds’ may take any form, including (in this example) illegitimate saved costs – such as not paying a licence fee that the client is obliged to pay.
It will depend on the events that led to the licence falling into arrears and how long a period of time the licence has been allowed to lapse. Where the circumstances indicate that the non-renewal of the licence was deliberate, this is a reportable money laundering offence. More on this is available in Chapter 2 of the latest CCAB-I AML Guidance updated in March 2022.
Are your AML Policies Controls & Procedures up to date?
We have just released our latest Anti-Money Laundering Policies Controls & Procedures Manual (March 2022) – View the Table of Contents click here.
We have also just released an updated AML webinar (March 2022) available here, which accompanies the AML Manual. It explains the current legal AML reporting position for accountancy firms.
To ensure your letters of engagement and similar templates are up to date visit our site here where immediate downloads are available in Word format. A bulk discount is available for orders of five or more items if bought together.
For our latest Audit Quality Control Manual (October 2021) (implementing the latest Irish Audit & Accounting Supervisory Authority standards including ISQC1 on audit quality control) click here. View the Table of Contents here.
by John McCarthy Consulting Ltd. | Jun 18, 2022 | Blog, News
Question from a firm – I am the MLRO in our firm. I am not sure whether I must or cannot report a situation I have been made aware of. Our client came to Ireland some years ago and for a few months she was unemployed but lived in a hotel.
Our Tax Manager asked her how she managed to fund this and she mentioned an offshore bank account of which we were unaware. The Tax Manager explained that any income would need to be declared on her tax return and the client asked her to forget she had mentioned it as she didn’t want the Revenue to know about it because the money had come from a friend. The Tax Manager came and reported to me as the MLRO.
My understanding of the rules is that because we were not being asked to give legal advice or clarify the law, legal professional privilege doesn’t apply to us here, but this is an area about which I am not too familiar, so I am grateful for some advice.
Answer – You are absolutely correct in your understanding. You need to consider the original source of the information. In this case it arose from a routine question during normal compliance work and so is not covered by the privileged circumstances exemption from reporting in privileged circumstances (see more in Chapter 7 (paragraph 7.4) of the latest CCAB-I AML Guidance updated in March 2022. It seems clear that the client is evading tax, and since the information came to you in the course of a regulated business you must report it as a suspicious transaction report (STR) to the Garda and the Revenue Commissioners as money laundering.
The other issue is that you cannot submit a tax return that you know to be incorrect; otherwise you would be involved in an arrangement to help your client defraud the Revenue.
You also need to consider your ethical position. The Code of Ethics of all professional accountancy bodies will state something to the effect that you cannot continue to act for a client on tax matters where you know her tax affairs are deliberately misstated, other than to help regularise the situation. If the client persists in this position you will need to resign.
Had the client come to you and openly disclosed the offshore account and was willing to get her tax affairs regularised while asking for your advice on what she should do, then the information would have been received in privileged circumstances (see Section 46 of the Criminal Justice (Money Laundering and Terrorist Financing) Acts 2010 to 2021) and you would not be able to report. You would still be in the same position from an ethical standpoint.
Are your AML Policies Controls & Procedures up to date?
We have just released our latest Anti-Money Laundering Policies Controls & Procedures Manual (March 2022) – View the Table of Contents click here.
We have also just released an updated AML webinar (March 2022) available here, which accompanies the AML Manual. It explains the current legal AML reporting position for accountancy firms.
To ensure your letters of engagement and similar templates are up to date visit our site here where immediate downloads are available in Word format. A bulk discount is available for orders of five or more items if bought together.
For our latest Audit Quality Control Manual (October 2021) (implementing the latest Irish Audit & Accounting Supervisory Authority standards including ISQC1 on audit quality control) click here. View the Table of Contents here.
by John McCarthy Consulting Ltd. | Jun 10, 2022 | Blog, News
Question from a firm – When a client moves address, do you need to redo the Money Laundering (ML) verification checks?
Answer – You should obviously update your records and then consider, on a risk sensitive basis, what (if any) evidence you need to support the change (e.g. obtain copy of a utility bill for the new home address – preferably a physical utility like gas/electric/broadband, but not a mobile phone bill). For most clients I would have thought that routine correspondence and dealings with the client would provide sufficient evidence to corroborate the change.
Also bear in mind the need to verify that the related appropriate update has been made to the RBO register entries (which are actually the client’s responsibility). This applies where the client is a beneficial owner of either a limited company or an Industrial & Provident Society. Such updates must be made ‘in a timely manner’ according to SI 110/2019.
Are your AML Policies Controls & Procedures up to date?
We have just released our latest Anti-Money Laundering Policies Controls & Procedures Manual (March 2022) – View the Table of Contents click here.
We have also just released an updated AML webinar (March 2022) available here, which accompanies the AML Manual. It explains the current legal AML reporting position for accountancy firms.
To ensure your letters of engagement and similar templates are up to date visit our site here where immediate downloads are available in Word format. A bulk discount is available for orders of five or more items if bought together.
For our latest Audit Quality Control Manual (October 2021) (implementing the latest Irish Audit & Accounting Supervisory Authority standards including ISQC1 on audit quality control) click here. View the Table of Contents here.
by John McCarthy Consulting Ltd. | Jun 6, 2022 | Blog, News
Question from a firm – As a follow up to last week’s question about the temporary staff and contractors, that work for us perhaps only for a few weeks or a month or so. We ask them to read our in-house AML Policies Controls & Procedures Manual and view the training webinar including the quiz.
What if they ‘fail’ the test? Do we ask them to do it again until they ‘pass’?
Answer – Paragraph 8.5.2 of the latest March 2022 CCAB Guidance on AML states that training ‘records should show the training that was given, the dates on which it was given, which individuals received the training and the results from any assessments.’
If the temporary staff and contractors have already received adequate training in previous positions there is no need to retrain them.
Our recommendation would be that you ask them to carry out your quick multi-choice test on the AML legislation and CCAB guidance. If they obtain a satisfactory score, then keep the results on file with their names/signatures and the date they took the test, as evidence that they were already familiar with the requirements.
If they score badly, then they should be required to undertake the AML training and do a new test. If they still score poorly they should re-sit the test alongside someone who corrects them and explains the answers as they take the test. This should help ensure that they understood the reasoning behind the answers.
Are your AML Policies Controls & Procedures up to date?
We have just released our latest Anti-Money Laundering Policies Controls & Procedures Manual (March 2022) – View the Table of Contents click here.
We have also just released an updated AML webinar (March 2022) available here, which accompanies the AML Manual. It explains the current legal AML reporting position for accountancy firms.
To ensure your letters of engagement and similar templates are up to date visit our site here where immediate downloads are available in Word format. A bulk discount is available for orders of five or more items if bought together.
For our latest Audit Quality Control Manual (October 2021) (implementing the latest Irish Audit & Accounting Supervisory Authority standards including ISQC1 on audit quality control) click here. View the Table of Contents here.
