Why are you vulnerable to ML/TF?

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Accountants offer a number of professional services such as acting as formation agents of companies and other legal structures which are prone to criminals seeking to launder money. Accountants may also assist in financial transactions and offer expert advice on the structure and strategy of financial transactions which may make it harder for law enforcement to detect ML/TF activities.

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The services that accountants offer may be more attractive to criminals now as the financial institutions such as banks are implementing more comprehensive AML/CFT controls.

DIA has rated the accountants sector as overall medium-high risk in its 2019 Sector Risk Assessment.

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What are the ML/TF risks faced by accountants?

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The money laundering and terrorism financing risks commonly associated with accountants are:

• Professional services that serve as gatekeepers which are attractive to criminals. The use of professional services may help criminals to conceal their identities and/or gain access to services not accessible by the general public.

• Access to large sums of money and trust accounts which may conceal the origin of the money being transferred.

• Politically Exposed Persons customers

• Dealing with other reporting entities such as real estate agents or banks makes it harder to identify the beneficial owners.

• Expert services such as preparing for transactions, assisting in purchasing or selling of assets/businesses, tax services (potential tax evasion), false accounting, managing charities, etc.

 

Accountants should undertake a comprehensive ML/TF risk assessment to identify, assess and mitigate the ML/TF risks.

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What services are covered by the AML/CFT Act 2009?

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The following services provided by accountants are captured by the AML/CFT Act 2009:

• Acting as a formation agent of legal persons or legal arrangements

• Acting as, or arranging for a person to act as, a nominee director or nominee shareholder or trustee in relation to legal persons or legal arrangements

• Providing a registered office or a business address, a correspondence address, or an administrative address for a company, or a partnership, or any other legal person or arrangement (unless it's solely for a service which isn't covered by the Act)

• Managing client funds, accounts, securities, or other assets

• Providing services (either yourself, or when you give instructions to someone else) to:

  • Carry out a real estate transaction (as defined in section 4 of the Real Estate Agents Act 2008).

  • Carry out a transaction on behalf of any person in relation to the buying, transferring or selling of a business or legal person (for example, a company) and any other legal arrangement; or creating, operating, and managing a legal person and any other legal arrangement.

  • Transfer a beneficial interest in land or other real property.

 

If you provide any of these services in your ordinary course of business, you are required to comply with the AML/CFT Act 2009.

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What is a Risk Based Approach AML/CFT regime?

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The AML/CFT regime is focused around the risk based approach, which means your compliance programme needs to be based on the risk assessment and appropriate to your business environment. You should not hire any consulting firms that tell you they have templated solutions for you to comply with the AML/CFT Act as each risk assessment and compliance programme should be unique to your business and practice.

 

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How can Riskverse help?

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We offer solutions that are easy to understand so you are not confused with the complicated terms generally used by ‘experts’ in this field.

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The following solutions may assist you in understanding your obligations and complying with the AML/CFT Act:

• AML/CFT Training: We provide customised training based on your risk environment and offer easy to understand examples to help your staff understand what needs to be done.

• AML/CFT Consulting: We can work with you to undertake risk assessments and design compliance programme which are unique to your business. Each risk assessment and compliance programme that we help you draft will be specifically designed for you and will not be based on a template copied from another company, so we make sure it is appropriate to your environment.

• AML/CFT Independent Audit: Our specialised CAMS qualified experts will carry out independent audit under Section 59 of the AML/CFT Act and provide recommendations to help you evaluate compliance and enhance overall control environment.