6 Red Flags of Money Laundering

6 Red Flags of Money Laundering

by | May 20, 2024 | Blog, News

The February 2023 issue of CA Magazine outlines some red flags of money laundering. Here we list six warning signs, adapted from that article, that accountants cannot afford to ignore.

  1. Evasiveness or unexplained spike in income: A client exhibiting evasive or nervous behaviours could indicate suspicious activity. Likewise, if turnover has doubled or tripled, with no explanation, it’s a red flag. Some clients may also find themselves being used as “money mules”, targeted by criminals using their bank accounts to help move stolen money.
  2. Clients in high-risk countries: Sanctions now prohibit firms from offering accountancy and consulting services to businesses linked to Russia and its ally Belarus, following the Ukraine invasion. While most accountants will be aware of this (along with sanctions against North Korea and Iran), the Government also urges the regulated sector to apply enhanced customer due diligence when dealing with around 30 other high-risk jurisdictions, including the Philippines, the UAE, and Barbados.
  3. Cash-based businesses: Businesses that deal primarily in cash are usually high risk. If you want to onboard a cash-intensive business, you need to monitor it more closely.
  4. A client with frequent changes of accountant can be another red flag.
  5. An unusual date of birth for a Beneficial Owner: A Beneficial Owner must be disclosed on RBO records, which should mean that the company owner can’t hide their identity should they be looking to transfer illegal assets via a shell company. Not all Beneficial Owners are in fact real. For example, in the UK there are more than four million businesses on the Companies House register, but around 4,000 people aged two or under apparently own some of these companies, according to a 2018 report from anti-corruption group Global Witness. It is also important to watch out for typos, as some criminals deliberately misspell their name multiple ways to thwart data searches.
  6. A client using an SLP or NILP: Scottish limited partnerships (SLPs) were originally established in the early 1900s for farm holdings, but the business structure has seen a 21st Century revival with criminals using them as shell companies. Following adverse media attention this criminal activity has moved onto NILPs (Northern Ireland Limited Partnerships) instead.

Accountants ought to be able to recognise these signs of money laundering to help safeguard financial systems and preserve the integrity of financial transactions.

To hear more about the latest AML developments and how to be on the alert for suspicions of money laundering and terrorist financing under the Criminal Justice (Money Laundering and Terrorist Financing) Acts 2010 to 2021, see our latest Anti-Money Laundering webinar here.

All our CPD courses are listed here, including our Audit Update webinar.

Please go to our website to see our:

  • Anti-Money Laundering Policies Controls & Procedures Manual (March 2022) — View the Table of Contents here.
  • AML Webinar (December 2023) available here, which accompanies the AML Manual. It explains the latest legal AML reporting position for accountancy firms and includes a quiz. Upon completion, you receive a CPD Certificate of attendance in your inbox.
  • Letters of engagement and similar templates. Please 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.
  • ISQM TOOLKIT, or if you prefer to chat through the different audit risks and potential appropriate responses presented by this new standard, please contact John McCarthy FCA by e-mail at john@jmcc.ie.
  • We typically tailor ISQM training and brainstorming sessions to suit your firm’s unique requirements. The ISQM TOOLKIT 2022 is available to purchase here.
Four Types of Accountants Who Can Become Ensnared in Economic Crime

Four Types of Accountants Who Can Become Ensnared in Economic Crime

by | May 18, 2024 | Blog, News

The February 2023 edition of CA Magazine, identifies various types of accountants who may be at risk of becoming entrapped in financial crime. Here we have (adapted from that article) a list of four of the characteristics of those accountants:

  1. The overworked sole practitioner—Sole practitioners are under more pressure to get things done by themselves, which presents challenges for compliance.

2. The accountant with the “tick box” attitude—These accountants view compliance merely as a tick-box exercise; however, the compliance process must be in-depth and have proper risk assessments. The                    “tick box” attitude can also happen to accountants who have clients they know well or clients they’ve had for many years, and do not keep up with the required due diligence

3. The accountant who doesn’t probe hard enough when unearthing something suspicious—Some accountants may not want to investigate further when they see something which might be an issue.                        Accountants generally need to exercise more robust professional scepticism.

4. The small practice approached by a big-shot overseas client—Overseas clients often deliberately target small practices and offer them higher fees (and even offer to pay up front), often hooking accountants who then find it difficult to disentangle themselves with their AML systems already compromised.

Awareness of these characteristics can help accountants be on guard against falling into economic crime.

To hear more about the latest AML developments and how to be on the alert for suspicions of money laundering and terrorist financing under the Criminal Justice (Money Laundering and Terrorist Financing) Acts 2010 to 2021, see our latest Anti-Money Laundering webinar here.

All our CPD courses are listed here, including our Audit Update webinar.

Please go to our website to see our:

  • Anti-Money Laundering Policies Controls & Procedures Manual (March 2022) — View the Table of Contents here.
  • AML Webinar (December 2023) available here, which accompanies the AML Manual. It explains the latest legal AML reporting position for accountancy firms and includes a quiz. Upon completion, you receive a CPD Certificate of attendance in your inbox.
  • Letters of engagement and similar templates. Please 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.
  • ISQM TOOLKIT, or if you prefer to chat through the different audit risks and potential appropriate responses presented by this new standard, please contact John McCarthy FCA by e-mail at john@jmcc.ie.
  • We typically tailor ISQM training and brainstorming sessions to suit your firm’s unique requirements. The ISQM TOOLKIT 2022 is available to purchase here.
After a Poor AML Inspection Result – 6 Things to Do (and 2 Things to Avoid)

After a Poor AML Inspection Result – 6 Things to Do (and 2 Things to Avoid)

by | May 18, 2024 | Blog, News

The scenario: Your firm has had a poor outcome from a recent AML Inspection and urgent remedial action is required.

You may have received a list of significant AML Compliance failings from your professional body which you are required to address within a defined timeline. Sometimes these failings are accompanied by additional points to be addressed before the next review.

The following six items need to be implemented as soon as possible:

Do:

  1. Promptly acknowledge receipt of the correspondence.
  2. If you think you are going to need more time to respond, contact the reviewer immediately and ask for the additional time you need. (You will only get one chance to make this request, and be sure to do so well before the time limit expires.)
  3. Consider carefully whether you need to obtain external assistance to deal with the matters, especially if:
    • You are not confident of your understanding of AML requirements
    • The reviewer has indicated that disciplinary proceedings are a possibility
    • You consider the reviewer’s comments are unfair or unreasonable
  4. Stand back and consider whether the firm’s entire approach to AML Compliance needs a re-think, including your firm’s use (or lack thereof) of an AML Compliance package
  5. Carefully study the reviewer’s criticisms and address them comprehensively in your response, including (if appropriate), revised versions of documents such as the firm’s:
  6. Ensure that all responses are factually correct and meticulously accurate.

DON’T

  1. Delay in responding to the review – be proactive.
  2. Criticise the reviewer’s approach or lack of understanding of your firm – instead take a positive approach and send the reviewer additional information to be considered in support of your case.

Overall, be positive and proactive for a much more successful outcome.

To hear more about the latest AML developments and how to be on the alert for suspicions of money laundering and terrorist financing under the Criminal Justice (Money Laundering and Terrorist Financing) Acts 2010 to 2021, see our latest Anti-Money Laundering webinar here.

All our CPD courses are listed here, including our Audit Update webinar.

Please go to our website to see our:

  • Anti-Money Laundering Policies Controls & Procedures Manual (March 2022) — View the Table of Contents here.
  • AML Webinar (December 2023) available here, which accompanies the AML Manual. It explains the latest legal AML reporting position for accountancy firms and includes a quiz. Upon completion, you receive a CPD Certificate of attendance in your inbox.
  • Letters of engagement and similar templates. Please 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.
  • ISQM TOOLKIT, or if you prefer to chat through the different audit risks and potential appropriate responses presented by this new standard, please contact John McCarthy FCA by e-mail at john@jmcc.ie.
  • We typically tailor ISQM training and brainstorming sessions to suit your firm’s unique requirements. The ISQM TOOLKIT 2022 is available to purchase here.
Are Your Engagement Letters up to Date?

Are Your Engagement Letters up to Date?

by | May 11, 2024 | News

Announcing Our Product Updates

The advent of the new Solicitors Accounts Regulations (effective for accounting periods commencing 1 July 2023 i.e. accounting periods ended 30 June 2024) and the significant 2024 revisions accounting standards FRS 102 and FRS 105 have prompted us to give a facelift to most of the templates on the www.jmcc.ie/store. We are adding new products/webinars all the time.

Easily downloadable in Word format, there are over 100 complete templates available at €60 plus VAT each. There is a 20% discount for orders of five or more (including webinars) when purchased in a single order. Depending on your requirements, we can also tailor other types of template letter to order. Please send us an e-mail to john@jmcc.ie.

For more details see https://jmcc.ie/publications-store/

There is also a search bar near the bottom of our home page (www.jmcc.ie) to quickly look up the product or webinar you require.

All our CPD courses are listed here, including our Audit Update webinar.

To hear more about the latest AML developments and how to be on the alert for suspicions of money laundering and terrorist financing under the Criminal Justice (Money Laundering and Terrorist Financing) Acts 2010 to 2021, see our latest Anti-Money Laundering webinar here.

Please also go to our website to see our:

  • Anti-Money Laundering Policies Controls & Procedures Manual (March 2022) – View the Table of Contents click here.
  • AML Webinar (December 2023) available here, which accompanies the AML Manual. It explains the latest legal AML reporting position for accountancy firms and includes a quiz. Upon completion, you receive a CPD Certificate of attendance in your inbox.
  • letters of engagement and similar templates. Please 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.
  • ISQM TOOLKIT or if you prefer to chat through the different audit risks and potential appropriate responses presented by this new standard, please contact John McCarthy FCA by e-mail at john@jmcc.ie.
  • We typically tailor ISQM training and brainstorming sessions to suit your firm’s unique requirements. The ISQM TOOLKIT 2022 is available to purchase here.
After the AML Inspection – 5 Most Important Things to Do (and 2 Things NOT to Do)

After the AML Inspection – 5 Most Important Things to Do (and 2 Things NOT to Do)

by | Apr 27, 2024 | News

So you’ve had an AML inspection from your professional body. Now it’s time to pick up the pieces.

Do:

  1. Respond in good time to enquiries from the reviewer (even if it’s merely to acknowledge receipt of correspondence).
  2. Ensure that the information you supply to the reviewer is meticulously accurate and complete.
  3. If asked to select documents relating to clients for submission to the reviewer, select those clients with care, review the documents before submitting them, and provide additional explanations of these documents to the reviewer if that may help.
  4. Keep a copy of everything you submit (or request a copy from your supervisory body if you do not have a copy).
  5. If you are not confident that your AML procedures are fully satisfactory, consider obtaining external assistance before responding to the reviewer.

 DON’T:

  1. Backdate or falsify any documents to be submitted for review.
  2. Waste the reviewer’s time with incomplete or half-baked responses hoping to buy extra time. If you have insufficient time, simply ask for more time at the earliest possible stage of the process.

All our CPD courses are listed here, including our Audit Update webinar.

To hear more about the latest AML developments and how to be on the alert for suspicions of money laundering and terrorist financing under the Criminal Justice (Money Laundering and Terrorist Financing) Acts 2010 to 2021, see our latest Anti-Money Laundering webinar here.

Please also go to our website to see our:

  • Anti-Money Laundering Policies Controls & Procedures Manual (March 2022) – View the Table of Contents click here.
  • AML Webinar (December 2023) available here, which accompanies the AML Manual. It explains the latest legal AML reporting position for accountancy firms and includes a quiz. Upon completion, you receive a CPD Certificate of attendance in your inbox.
  • letters of engagement and similar templates. Please 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.
  • ISQM TOOLKIT or if you prefer to chat through the different audit risks and potential appropriate responses presented by this new standard, please contact John McCarthy FCA by e-mail at john@jmcc.ie.
  • We typically tailor ISQM training and brainstorming sessions to suit your firm’s unique requirements. The ISQM TOOLKIT 2022 is available to purchase here.