Supervision by the IFA
The Money Laundering Regulations 2017 (MLR 2017) require all firms that provide accountancy services, trust or company services, or related services such as tax advice, audit or insolvency, to be supervised for compliance by one of the professional bodies in Schedule 1 to the MLR 2017 (also known as supervisory authorities) or HMRC.
Who do we supervise?
The IFA automatically supervises member firms. In accordance with the IFA Bye-laws, an IFA member firm means a sole practitioner, partnership, limited partnership or body corporate which is engaged in public practice where more than 50% of the rights to vote on all, or substantially all, matters of substance regarding the firm are held by members.
Accountancy firms that don’t meet the definition of a member firm can apply to the IFA for anti-money laundering supervision by emailing email@example.com. In order to apply, at least one partner, owner or director of the firm must be an IFA member, or the firm must be owned by a firm which has at least one IFA member.
If a firm provides trust or company services (TSCP) as part of their main accountancy practice, all of their accountancy work (including TSCP) will be supervised by the IFA. Further information on what types of services are included in TCSP work and HMRC’s TSCP register can be found here.
If a firm has a group structure and has subsidiaries which are authorised firms under the Financial Services and Markets Act for FCA-authorised activities, the IFA will supervise the non-FCA regulated work.
IFA’s supervisory approach
The IFA adopts a risk-based approach for selecting the firms for an AML monitoring. This risk-based approach is based on information from the annual firm, member and affiliates returns as well as other sources.
Based on the IFA’s risk assessment of the firm’s money laundering/terrorist financing risks, the IFA will conduct on-site visits and/or desk-top/telephone interview visits. If you are selected for a visit, the IFA expects you to collaborate with the visit process.
At the end of the visit, we will advise you on any improvements you should make to reduce the risk to yourself and remain compliant with legislation. In addition, we will help you understand your obligations under the Money Laundering Regulations 2017 and the Money Laundering Regulations 2019 to ensure that you are fully compliant with the law.
Failure to co-operate with IFA’s supervisory approach or take action when non-compliant with the law may lead to disciplinary action by the IFA. While firms will be required to be compliant with the new requirements from the Money Laundering Regulations 2019 from 10 January 2020, in our capacity as an AML Supervisory Body the IFA will take into account the short lead-in time which firms have been given to implement all the new requirements in assessing the response to non-compliance identified. Each case will be assessed on its own merits.
The IFA reserves the right to charge administration and/or late cancellation fees where members fail to engage or cancel agreed review dates, without sufficient notice. The administration and/or late cancellation fees are designed to cover the costs incurred in having to rearrange the visit.
What to expect during a visit
The AML reviewer will request a list of documents to be reviewed either onsite or electronically if a desktop review is being conducted. If you use AMLCC, the reviewer will request temporary access to AMLCC to review your documents. It is vital that the reviewer has access to relevant documents in order to conduct their work. The reviewer will also need to speak to relevant individuals as part of their review. However, you will be free to deal with your own work whilst the reviewer conducts his visit.
What to expect after a visit
Following the visit, a report will be produced detailing whether or not you were compliant with the Money Laundering Regulations 2017, steps that you are required to undertake to become compliant and also suggestions for improving your practice management. So, the report goes beyond compliance and is aimed at improving your practice.
You will be required to respond within 10 working days with an update on how you will action the required improvements.
Failure to meet this requirement may lead to disciplinary action by the IFA for failure to co-operate with IFA’s monitoring and supervisory process.
Feedback on our supervisory visits
If you are worried about our supervisory visit or are wondering what the benefits are to your firm, please read below some endorsements from members regarding our supervisory visits.
"We were delighted that we were picked for a AML supervision visit. The visit from start to finish was painless and efficient.
Alan Hind at the IFA was professional and very informative. He identified strengths and weaknesses at my practise and made constructive recommendations.
The IFA has an arrangement with AMLCC which is free for IFA members and I must say the system works great and saves a lot of time with compliances and AML in general."
Joseph Mills AFA, MIPA, ICPA, Managing Director, Alston Oak
"...when I first found out that were going to be looked into by the IFA anti-money laundering section I was quite concerned.
However, after having the meeting ...it was nothing like I expected. Alan Hind explained that he was here to assist us in reaching the correct standard required for the new AML rules.
I found the meeting to be very helpful and informative it also answered quite a lot of my concerns and made the situation regarding compliance a lot clearer.
I am very grateful to both Alan and the IFA for arranging the meeting. I personally think that what they are doing is brilliant."
D & D Accountancy Services Ltd
HM Treasury supervisors' report
In order to improve the transparency and accountability of supervision and to encourage good practice, the Treasury has worked with supervisors to develop an annual report on anti money laundering and counter terrorist finance supervision.
Please contact the compliance department by email at firstname.lastname@example.org or phone if you are have any queries regarding supervision or would like to apply to be supervised by the IFA.