by John McCarthy Consulting Ltd. | Feb 22, 2021 | Blog, News
Abiding by money laundering regulations is a serious business to say the least. Early last month a money service business (MSB), based in Luton, UK was fined £23.8 million by the UK HMRC (the supervisor for MSBs) for ‘significant breaches’ of AML legislation. There are no rights of appeal.
The offences occurred between July 2017 and December 2019 relating to:
- carrying out risk assessments;
- incorrect policies, controls and procedures;
- conducting due diligence; and
- record keeping.
Money service businesses offer customers the ability to remit cash, exchange currencies and cash cheques quickly and easily without the need to rely on banking facilities. They would be deemed to high risk operations.
A quick examination of the company’s latest accounts to 30 November 2019 shows balance sheet net assets of £154,824 and cash at bank of over £680,000, so the ability to pay this fine is not that obvious.
Watch out for our 2021 update to the AML Policies & Procedures Manual coming soon.
For a complete list of our time-saving engagement letter templates for FRS 102 audit, FRS 102 audit-exempt, VAT, visit our store here. All our engagement and representation letter templates are up to date for Brexit and Covid 19.
by John McCarthy Consulting Ltd. | Jan 11, 2021 | Blog, News
When you are doing your Client Due Diligence on a new client/customer, did you ever wonder where you could obtain a list of sanctioned or high-risk territories/jurisdictions?
Well, a reliable source is near at hand. The Financial Action Task Force (FATF) identifies jurisdictions with weak measures to combat money laundering and counter terrorist financing (AML/CFT) in two FATF public documents. These two reports identify:
These reports are issued three times a year in February, June, and October.
The FATF’s process to publicly list countries with weak AML/CFT regimes has proven to be effective. For example, as of October 2018, the FATF had by then reviewed over 80 countries and publicly identified 68 of them. Of these 68, over 80% have since made the necessary reforms to address their AML/CFT weaknesses and have been removed from the process.
The first public document, the FATF’s Public Statement, identifies countries or jurisdictions with such serious strategic deficiencies that the FATF calls on its members and non-members to apply counter-measures. These include enhanced due diligence measures proportionate to the risks arising from the deficiencies associated with the country.
The statement “Improving Global AML/CFT Compliance: On-going process” identifies countries or jurisdictions with strategic weaknesses in their AML/CFT measures, but that have provided a high-level commitment to an action plan developed with the FATF. The FATF encourages its members to consider the strategic deficiencies identified for these jurisdictions.
If any country fails to make sufficient or timely progress, the FATF can decide to increase its pressure on the country to make meaningful progress by moving it to the Public Statement.
For more information about the FATF’s process to identify high-risk and non-cooperative jurisdictions and monitor their progress, click here.
Watch out for our 2021 update to the AML Policies & Procedures Manual coming soon.
For a complete list of our time-saving engagement letter templates for FRS 102 audit, FRS 102 audit-exempt, VAT, visit our store here. All our engagement and representation letter templates are up to date for Brexit and Covid 19.
by John McCarthy Consulting Ltd. | Jun 5, 2019 | Blog, News
As we wrote in a recent blog on the topic of AML supervision, the report by OPBAS – the Office for Professional Body Anti-Money Laundering Supervision slates the accountancy and legal professions for lax regulation of their sectors.
Although this is a UK regulator , its views are influential with regulators elsewhere. For accountants there is likely to be a tougher enforcement approach taken in future as a result of this stinging report. OPBAS found that in 2018, only half of professional bodies issued fines for AML failings. It was even less in 2017 at 27%.
OPBAS has called for the Professional Body Supervisors (PBSs) to share information as a way of cracking down on covert activity. Almost half of the 22 bodies do that now, but OPBAS called for 100% cooperation by all bodies.
Some professional bodies have no resources allocated to intelligence sharing while others have no clear responsibilities or systematic approach to using intelligence to inform decisions or supervisory and enforcement work. There was also evidence that suspicious activity reports had not been raised by the PBSs when they should have been.
OPBAS has called on all PBSs to undertake risk-based supervision of the professions i.e. focused on the riskiest types of business or clients like tax, conveyancing, company formation. The watchdog says this must be properly resourced, with leadership from the top, and robust enforcement outcomes, along with a positive uptake in intelligence sharing.
Read that full OPBAS report here. To get prepared for the more robust AML visits that are surely coming see our latest Anti-Money Money Laundering blog here.
Also watch out for our new fully updated AML Policies & Procedures Manual coming in June 2019 – fully updated for the Criminal Justice (Money Laundering and Terrorist Financing) Acts, 2010 to 2018 which came into force on 26 November 2018.
For on-demand webinars on AML and developments in Investment Property Accounting, FRS 105, Common Errors in FRS 102 Accounting and the latest on FRS 105 and company law, visit our online webinar training website. Once viewing is completed customers will receive a CPD Certificate confirming their learning.
by John McCarthy Consulting Ltd. | May 29, 2019 | News
In a recent UK report by OPBAS – the Office for Professional Body Anti-Money Laundering Supervision it accuses many professional body supervisors (PBSs) of failing to supervise standards robustly, partly for fear of upsetting members and because they believe money laundering is not an issue for firms.
This is the first review by OPBAS of the 22 anti-money laundering (AML) supervisors in accountancy and law, which says the results show ‘a very variable picture’.
The OPBAS view is that the accountancy sector and many smaller professional bodies focus more on representing their members rather than robustly supervising standards. OPBAS say that this because they don’t believe – or don’t want to believe – that there is any money laundering in their sector.
There will be more on the report in future blogs. Read that full report here.
Also watch out for our new fully updated AML Policies & Procedures Manual coming in June 2019 – fully updated for the Criminal Justice (Money Laundering and Terrorist Financing) Acts, 2010 to 2018 which came into force on 26 November 2018.
For on-demand webinars on AML and developments in Investment Property Accounting, FRS 105, Common Errors in FRS 102 Accounting and the latest on FRS 105 and company law, visit our online webinar training website. Once viewing is completed customers will receive a CPD Certificate confirming their learning.
by John McCarthy Consulting Ltd. | Mar 5, 2019 | Blog, News
In spite of efforts to make UK registered companies disclose their ownership through the people with significant control (PSC) register, thousands of companies don’t comply with the rules brought in to counter fraud and money laundering.
According to a 2018 Freedom of Information request to Companies House by Fortytwo Data (now Napier), over 57,000 UK businesses are not yet compliant with new regulations.
Similar requirements are in the process of being introduced in Ireland, called the Beneficial Ownership Register to be maintained by the Companies Registration Office (CRO), as part of the enforcement of the EU Fourth AML Directive.
It is a criminal offence not to follow the PSC/Beneficial Ownership requirements, with potential sanctions including fines for the companies involved and up to two years in prison for the culpable individuals.
PSCs/Beneficial Owners, are natural persons who own directly or indirectly at least 25% of a company’s shares or control at least 25% of its voting rights, or have control over appointments to the board of directors.
The PSC/Beneficial Ownership Registers are designed to reduce the ability of money launderers to hide and funnel their ill-gotten gains, using apparently legitimate corporate structures.
For more up to date information on developments in company law and anti-money laundering, visit the new online webinar training section of our website. Once viewing is completed customers will receive a CPD Certificate confirming their learning.
