Who needs AML supervision?
AML supervision: registration
If the firm or sole practitioner provides audit, insolvency, accountancy services, tax advice and trust or company services, it must be registered for anti-money laundering (AML) supervision.The scope of the The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (Money Laundering Regulations 2017) is broad and includes businesses in the UK which have cross-cross border models where day-to-day management takes place from a UK registered office or UK head office.
Regulation 8 of Money Laundering Regulations 2017 states that the regulations apply to any persons acting in the course of business as an auditor, insolvency practitioner external accountant, tax adviser or trust and company service providers. The Accountancy AML Supervisors Group (AASG) have produced a flow chart to identify who the most appropriate supervisory authority is for your firm. The flow chart doesn’t assume automatic supervision – in some instances you may still need to apply directly to the appropriate supervisory authority.
The Money Laundering Regulations 2017) and the IFA’s bye-laws and regulations give the IFA the responsibility of supervising member firms and firms that have contracted with the IFA for supervision and oversight for anti-money laundering or other regulatory purposes (contracted firms).
Businesses required to register for AML supervision
Under Money Laundering Regulations 2017, firms and sole practitioners that provide the following services by way of business are required to be supervised:
Registered auditors who are licensed to conduct a statutory audit for companies and other legal entities.
Insolvency practitioners who are licensed to act on behalf of companies and individuals when they are facing insolvency or acute financial distress. For solvent companies, an insolvency practitioner may help directors who have chosen to liquidate their company to extract profits by way of a members’ voluntary liquidation.
Accountants who provide accountancy services to other persons by way of business. Accountancy services includes any service which involves recording, reviewing, analysing, calculating or reporting of financial information and which is provided under arrangements other than a contract of employment. This may include payroll agents, customs practitioners, freight forwarders and similar businesses if they provide accountancy services.
Tax advisers who provide material aid, assistance or advice on someone’s tax affairs, both directly and indirectly. This includes tax advice given to clients, including completing and submitting tax returns, advice on whether someone is liable to tax, or advice on the amount of tax due. This may include payroll agents, customs practitioners, freight forwarders and similar businesses if they provide tax advice.
Trust or company service providers which includes a firm or sole practitioner whose business is to:
- form companies or other legal persons;
- act, or arrange for another person to act, as a director or secretary of a company;
- act, or arrange for another person to act, as a partner (or in a similar position) for other legal persons;
- provide a registered office, business address, correspondence address or administrative address for a company, partnership, or other legal person or arrangement;
- act, or arrange for another person to act, as a trustee of an express trust or similar legal arrangement;
- act, or arrange for another person to act, as a nominee shareholder for another person, unless the other person is a company listed on a regulated market which is subject to acceptable disclosure requirements.
A person is still considered to be a TCSP provider even if these services are provided incidentally to other accountancy services, or they are provided infrequently or on a one-off basis.
Additional guidance on AML supervision
Businesses offering software or hardware solutions for accountancy, bookkeeping, payroll or tax are not providing accountancy services that are subject to AML supervision provided that they do not prepare or analyse any financial information themselves for their clients. In such circumstances, firms and sole practitioners need to consider the quantity and nature of human input that is required as part of the service. Similar considerations apply to payroll services providers.
Guidance related to sub-contractors and secondees is available in Appendix A of the Anti-Money Laundering and Counter-Terrorist Financing Guidance for the Accountancy Sector (AMLGAS).
Further guidance on less clear cut areas of AML supervision is available in the Anti-Money Laundering and Counter-Terrorist Financing Guidance for the Accountancy Sector (AMLGAS).
Businesses that are not required to register with the IFA for AML supervision
You do not need to be supervised by the IFA if your firm or practice does not meet the definition of member firm and it is:
- already supervised by another professional body included in Schedule 1 to the Money Laundering Regulations 2017 or HMRC;
- regulated by the FCA for another purpose.
Businesses that want to register for AML supervision with the IFA or those that have a supervision query should contact the compliance department by email at [email protected]. See IFA AML supervision for further information.
Raise an AML concern
If you believe a firm or sole practitioner supervised by the IFA is breaching the Money Laundering Regulations 2017, you can raise your concern confidentially.