How can AML affect me?
The Money Laundering Regulations 2017 apply to a number of different business sectors, including accountants. Every IFA member that is covered by the regulations will have to implement certain controls to prevent money laundering and is required to be supervised by the IFA.
Who do the money laundering regulations apply to?
The Money Laundering Regulations 2017 apply to all individuals and businesses that provide accountancy services, trust and company services or related services such as tax advice, audit or insolvency by way of business. However, the regulations do not include a definition or list of accountancy services. A definition of accountancy services is found in the CCAB guidance on anti-money laundering 2008. This defines accountancy services as including, any service provided under a contract for services (ie, not a contract of employment) which pertains to the recording, review, analysis, calculation or reporting of financial information. Based on this definition, to help its members, the IFA has drawn up a list of accountancy services which are are likely to be included within the scope of the money laundering regime and requirements.
So, IFA members and members in public practice are covered by the Money Laundering Regulations 2017. Some IFA members who are not in practice may not consider themselves to be in scope of the money laundering regulations. However, anyone whose business provides any of the following services needs to consider carefully whether the regulations apply:
- company formation services;
- company correspondence and registered office services;
- company secretarial or administration;
- acting or providing someone to act as directors, trustees or in similar roles;
- trust advisory services, formation and administration; and
- interim managers who provide accounting services "under a contract for services" rather than as employees.
Further guidance on this is available by HMRC dated July 2008.
Who is not covered by money laundering regulations?
IFA members who are not included within the scope of the money laundering regulations are:
- Interim managers who do not provide directorship or accountancy services. So if you are not acting as a director and are not providing accountancy services (eg providing HR services) you will not be in scope of the money laundering regulations.
- Temporary employees and employees of a recruitment agency or other third party, rather than the client, are not within the scope of the regulations (though the employer may be).
- employees of organisations which are not providing the above accountancy services;
- sub-contractors where they provide accountancy services to other firms where all their clients are supervised accountancy services providers, provided that:
- they don't contract with the end client;
- they are included in all the firms' anti-money laundering provisions (including reporting and training); and
- this "arrangement" is evidenced by both businesses, most generally in their contractual terms.
If sub-contractors supplement a practice by providing services to their own clients they will need to register for money laundering supervision as an accountancy services provider with the IFA.