It’s extremely important that practitioners give the Anti-Money Laundering (AML) legislation the attention it deserves and ensure full compliance with the responsibilities placed upon them by the law.
A case that dates back to December 2016, illustrates the importance of remaining alert for the red flags that can indicate money laundering (ML) is taking place. An ICAEW member, based in Leeds, was fined £5,000 by Leeds Magistrates Court and also the ICAEW severely reprimanded him, ordering that he pay costs of over £3,000 and seek training in the operation of the AML legislation.
The AML offence related to the fact that the client ‘Ms A’, was advised by HMRC that they were enquiring into their Corporation Tax Return. Ms A in turn advised the accountant that she and her husband were moving to another accountant who was presumably more experienced in tax enquiry work. She also pointed out that the issue related to an over-claim on mileage expenses and filing false tax returns.
This very fact was enough to warrant that the accountant ought to have known that the client had falsified their claims and tax was understated, irrespective of the amount of tax involved and that a ML offence had occurred. Yet the accountant did not make the necessary notifications to the authorities. Unknown to the accountant, the client’s company was involved in a much more serious fraud on the NHS by supplying false invoices for training services provided by her husband, who worked within the NHS.
The Judge indicated his view that the defendant ought to have been aware of his professional obligations concerning disclosures of this type. The belief that those disclosures would be taken up by the newly instructed tax specialists for Ms ‘A’ was not a meaningful excuse.
Money Laundering legislation needs respected and reports must be made where the circumstances necessitate it, irrespective of the amounts involved, as materiality is zero. This accountant has paid dearly for failure to do so and it is a salutary lesson for us all.
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 courses are listed 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.
Money Laundering – Watch the Tell Tale Signs
