You know Lulu, off of the sixties, had a big hit with Shout. The one where she started with a big ‘Well…
Let it all out
These are the things I can do without
How very apt.
If you can’t remember because age has caught up with you or you are too young to have a clue what on earth this is about here is Lulu in 1965. The year before we started going on about the World Cup.
Lulu can help with Anti-money laundering procedures, in a roundabout way. There is no doubt that your professional body will focus on AML (anti-money laundering) during a visit (they are utterly obsessed) and increasingly on visits this is not going too well. (See what we did with that well).
These are the key things you must do:
1. Firm wide risk assessment
Your practice must have a written risk assessment in place. ICAEW have placed an example one on their website ICAEW risk assessment. See the last few pages.
Don’t copy it word for word! However, it is an excellent template.
2. Initial ID (identification) checks
OK, you’ll be doing this one. Everyone gets this correct. In fact, you will have done too much.
3. On-going due diligence
And this is the one you are probably not doing. Many firms ring us before a regulatory visit to say:
“We have done the ID and everything is tickety-boo.” (actually, nobody has ever said tickety-boo but it conveys the idea). Ok they could have said hunky dory but we have already got one star from the sixties in this article without adding another. (Google: hunky dory if you’ve no idea).
“But what about the on-going checks?”
“Erm, the what?”
So, on every file you need evidence that you have considered AML for that client. Unless you have purchased an AML manual, there is no freely available checklist (though the checklist in point 5 is a useful starting point). The checklist can be to be short and cover key areas such as:
1. Has there been any change in the structure of the client? E.g. new shareholders, new directors, partners etc.
2. Are there any unsubstantiated transactions?
3. Any transactions or change in the nature of the trade?
4. And so on…
Now, the thing here is there is no correct answer and every practice will have a different risk assessment profile meaning the questions will vary a little practice-to-practice.
The form needs signing off by the team member and client partner.
Remember it is needed for
EVERY CLIENT – EVERY YEAR – EVERY ASSIGNMENT
4. Annual money laundering review
You need to complete an annual money laundering review. Your professional body will have a checklist ICAEW checklist. Guess what it is needed every year! The clue is the word annual.
5. Know your client
We are increasingly seeing a requirement to complete a new client information sheet ICAEW example.
The emphasis here is on the AML aspects. Ideally you need to link to the risk assessment (see above). The concept is you identify in your risk assessment the typical profile of your clients and what you will do if a new client is taken on outside of that profile.
You must train all your team on AML. This is a requirement of the CCAB regulations CCAB guidance see section 8
Good news we have an AML training webinar (you didn’t think we’d miss the opportunity to mention it – did you?) Webinar
At the end of the day failings in any or indeed all of the above often results in a restriction placed on the firm. Typically, there is a requirement for an external visit to confirm your AML is now up to speed. The report goes to your regulator and is costly in terms of time and money.
It may make you want to Shout in exasperation with the time and costs all this takes (for no reward financial or otherwise), but the regulator’s tanks are bigger than yours and it is easier to do it as you plod along.