Anti Money Laundering (AML) Compliance
Anti Money Laundering (AML) is a set of laws and regulations that were formed to prevent criminal activity whereby people disguise legally obtained funds as legitimate income. Whilst AML only actually covers a small range of accountancy transactions and criminal behaviour, the implications of such activity can be incredibly broad.
Why Is AML Important to Accountants?
AML forms a vital part of the accountancy and financial profession; it ensures correct regulation and protection from money laundering. In the past, accountants might have been targeted to aid with these fraudulent transactions. According to the National Crime Agency, money laundering costs the UK over £100 billion every year, however with the implementation of AML compliance only 1% of this is related to applications submitted by accountants. All financial practice firms are required to put controls in place which prevent them from being used as part of a money laundering activity.
Who Does It Apply To?
The AML regulations apply to both accountants and financial professionals that provide the following solutions:
- Bookkeeping services
- General accountancy
- Tax advice
- Submitting tax returns
- Business tax advice
As part of the compliance, accountants should implement:
- Risk management practices
- Customer due diligence
- Reliance and record keeping
- Monitoring and management of compliance
The 5 Key Stages
In order to complete the AML compliance there are 5 key stages:
- Identify – make sure you need to be compliant with the AML regulations (for example if you are a member of a supervisory body e.g., ICB, ICAEW or ICPA, then you might already be covered)
- Collect – ensure you have the right tools in place to safely and correctly collect client data
- Monitor – be vigilant throughout the relationship with your client, continue to assess all activities
- Storage – all documentation should be safely secured, correctly filed and easily accessible
- Report – If any unusual transactions or suspicious activities occur then these should be immediately reported.
If you have any questions in regard to AML or need some accountancy support please call us on 01173 700 079 or e-mail firstname.lastname@example.org.