International law and guidance

The Financial Action Task Force

The Financial Action Task Force (FATF) is an inter-governmental body whose purpose is the development and promotion of national and international policies to combat money laundering and terrorist financing. Its 40 Recommendations are backed by mutual evaluations of its member countries. Countries which are not members of FATF may be members of a FATF-style regional body.

In consultation with members of the accounting profession, FATF has also issued Risk Based Approach Guidance for Accountants and a report on Virtual Currencies and AML Risks.

European requirements

The European Union Fourth Anti-Money Laundering Directive (4 AMLD) was enacted on 25 June 2015 and replaced the previous Third Directive. All EU member states, including the UK, had a two year window for being complaint with the mandates by 26 June 2017.

The UK’s Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017  (MLR 2017) are intended to ensure that the UK’s anti-money laundering regime implements the EU Fourth Money Laundering Directive and is in line the Financial Action Task Force’s standards and recommendations. 

The Federation of European Accountants (FEE) has published two information papers on the 4AMLD and has issued publications on financial crime.

US requirements

The United States of America has federal Anti-Money Laundering laws and 38 of the 50 US states have AML laws. Some of these state regimes merely establish reporting requirements, while others either mirror federal law or, in some cases, are more stringent than federal law.

During the 1990s, a series of AML laws were enacted to strenthen the AML regime. The most significant of these laws was the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001 (the Patriot Act),  which was passed into law in the immediate aftermath of the terrorist attack. The Patriot Act amended The Bank Secrecy Act (BSA) in order to strengthen the government’s ability to prevent, detect and prosecute international money laundering and the financing of terrorism.

To date, the AML procedures requirements of the US Patriot Act do not apply to non-financial institutions including accounting firms and law firms. Nor are these institutions required to file SAR's.