You are the MLRO for a firm of accountants. At a Chamber of Commerce dinner you were attending recently, a client you met there tells you that he is having an extension built onto his home. The contractors want payment in cash, which he says he suspects is because they will not be declaring it to the Revenue.
Do you have a duty to report this suspected tax evasion as money laundering, especially as the contractor has nothing to do with your firm?
The issue here is not that payment is in cash, but that the client has said he suspects tax evasion by the contractor. If the information comes to a relevant person (the MLRO in this case) during the course of his/her business, this must be reported.
The intention to commit a crime (in this case tax evasion) can itself be a crime, and although you do not know for a fact that the contractor intends to evade tax, it seems probable that he does.
Suspicion is enough (no proof is required from the MLRO’s point of view). You have obtained the information in the course of business, and it makes no difference that the person under suspicion is not actually your client.
You should not inform the client of your action, as this could constitute ‘tipping off’ or prejudicing the investigation according to Section 49 of the Criminal Justice (Money Laundering and Terrorist Financing) Acts 2010 to 2021. Your report to the Garda and the Revenue Commissioners (via the ROS portal) can name only your client: If the Garda/Revenue decide to investigate, they can ask for the information from your client.
For more on this topic see the newly created Chartered Accountants Ireland AML Technical Hub
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.
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.