KYC/AML Checks for Accountants in the UK

Accountants play a big role in the UK’s money world. They help with important money tasks that keep the UK’s economy running smoothly. Because of this, accountants must be careful to ensure they don’t help bad people do illegal things with money.

As of 13 July 2021, new guidelines have emerged, replacing the preliminary draft from September 2020. However, since the UK is no longer part of the EU, some old rules don’t apply anymore. This blog will discuss how accountants can stop illegal money activities and prevent funding to bad groups.

AML Checks for Accountants in the UK

UK accountants play a pivotal role in ensuring financial transparency. Several laws and regulations have been established to help them navigate the complex landscape of anti-money laundering (AML) and counter-terrorist financing.

Here’s a simplified overview:

  • Primary Laws & Regulations

At the heart of the UK’s AML framework are the Proceeds of Crime Act 2002 (POCA) and the Terrorism Act 2000. These laws outline the main offenses related to money laundering and terrorist funding.

The Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017, commonly known as “the Regulations,” further detail the responsibilities of businesses, including Trust and Company Service Providers (TCSPs).

  • Additional Legislation

The Criminal Finances Act 2017 enhances the powers of law enforcement agencies, addressing issues like tax evasion. Meanwhile, the Counter-Terrorism (Sanctions) (EU Exit) Regulations 2019 focuses on freezing the assets of those involved in terrorism. The Anti-terrorism, Crime, and Security Act 2001 and the Counter-terrorism Act 2008 provide additional measures to safeguard against terrorism and its financing.

  • Reporting & Compliance

If accountants suspect any illicit activities, they must report them. The POCA and the Terrorism Act 2000 emphasize the importance of reporting suspicious activities. Failing to report or alert someone about a report can lead to offenses.

  • HM Treasury’s Role

The Treasury can freeze the assets of individuals or groups believed to be involved in terrorism. The Office of Financial Sanctions Implementation (OFSI) lists those under financial sanctions. Accountants need to be aware of this list and ensure compliance.

  • HMRC’s Supervisory Role

HMRC oversees businesses’ compliance with the UK’s AML regulations. They ensure businesses adhere to the rules and can gather information for tax purposes.

UK accountants must be well-versed with these laws and regulations to ensure they’re not inadvertently facilitating money laundering or terrorist financing. Staying updated and compliant is a professional obligation and a crucial step in safeguarding the UK’s financial system.

Essential KYC/AML Checks for Accountants in the UK

Ensuring compliance with AML regulations is crucial for UK accountants. Here’s a simplified checklist to help navigate this responsibility:

  • Customer Checks: Always thoroughly check customers and monitor their activities regularly.
  • PEP Identification: Recognize if a customer or their close contacts are politically exposed persons (PEPs) and take extra care in these cases.
  • Nominated Officer: Appoint a dedicated person to handle reports of suspicious activities and liaise with the National Crime Agency.
    Staff Training: Ensure your team knows how to spot potential money laundering and understands the importance of reporting any concerns.
  • Record Keeping: Keep detailed and updated records of all transactions and customer interactions.
  • Policy Review: Regularly update your business’s policies and procedures to stay compliant.
  • Compliance Monitoring: Set up processes to ensure all policies and procedures are adhered to.
  • Transaction Monitoring: Be alert to large or unusual transactions that don’t seem to have a clear business reason.
  • New Business Risks: Before adopting new products or technologies, assess their money laundering risks and take steps to manage them.

By following this checklist, UK accountants can play their part in preventing financial crimes and ensuring a transparent financial system.

KYC Hub's AML Screening and Monitoring Solution

Essential Resources for KYC/AML in UK Accountancy

For a business offering accountancy and trust or company services that are overseen by HMRC (Her Majesty’s Revenue and Customs), there are some guidelines you should be aware of. For accountancy tasks, businesses should refer to the online guidance by the CCAB (Consultative Committee of Accountancy Bodies).

Additionally, there’s the Joint Money Laundering Steering Group. This group consists of representatives from different financial trade associations. They’ve crafted a comprehensive guide for their members and businesses under the FCA (Financial Conduct Authority). This guide delves into verifying customer details, reporting unusual financial activities, training staff, and maintaining proper records. They also provide insights into the regulations in other countries.

The FCA has a dedicated guide for specific rules concerning politically influential individuals. To report suspicious financial activities, the NCA (National Crime Agency) offers guidance on how to submit Suspicious Activity Reports (SARs).

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