Together with the Accountancy AML Supervisors’ Group (AASG), the CIOT has proposed several points which could increase the effectiveness of the UK’s anti-money laundering regime:
Supervision requirement: the UK Money Laundering Regulations (the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations, SI 2017/692 – the MLRs) lack explicit language mandating supervision for relevant persons. While they identify which businesses fall under regulation and designate supervisory authorities, there is no direct obligation for these individuals to register with a supervisory authority. Changes should be made to prevent exploitation of this potential gap by those seeking to avoid supervision.
Fines and sanctions: professional bodies can exclude members as a severe sanction, but certain terms including ‘tax adviser’ and ‘tax agent’ are not ‘reserved’ terms, allowing excluded individuals to continue offering services. This creates a disparity between professional bodies’ intent to remove such practitioners and HMRC’s limited ability to refuse supervision. Amending the MLRs to permit HMRC to consider professional body exclusion or AML misconduct in refusing supervision is suggested.
Director verification: the MLRs require relevant persons to verify the full names of corporate directors. In the accountancy sector guidance (see the latest version of AMLGAS), this involves standard identity checks on directors. Although the Treasury endorsed this approach, it is not uniformly applied across sectors, leading to inconsistencies. Government should clarify whether director verification standards should align with those for beneficial owners, ensuring consistency across regulated sectors.
Together with the Accountancy AML Supervisors’ Group (AASG), the CIOT has proposed several points which could increase the effectiveness of the UK’s anti-money laundering regime:
Supervision requirement: the UK Money Laundering Regulations (the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations, SI 2017/692 – the MLRs) lack explicit language mandating supervision for relevant persons. While they identify which businesses fall under regulation and designate supervisory authorities, there is no direct obligation for these individuals to register with a supervisory authority. Changes should be made to prevent exploitation of this potential gap by those seeking to avoid supervision.
Fines and sanctions: professional bodies can exclude members as a severe sanction, but certain terms including ‘tax adviser’ and ‘tax agent’ are not ‘reserved’ terms, allowing excluded individuals to continue offering services. This creates a disparity between professional bodies’ intent to remove such practitioners and HMRC’s limited ability to refuse supervision. Amending the MLRs to permit HMRC to consider professional body exclusion or AML misconduct in refusing supervision is suggested.
Director verification: the MLRs require relevant persons to verify the full names of corporate directors. In the accountancy sector guidance (see the latest version of AMLGAS), this involves standard identity checks on directors. Although the Treasury endorsed this approach, it is not uniformly applied across sectors, leading to inconsistencies. Government should clarify whether director verification standards should align with those for beneficial owners, ensuring consistency across regulated sectors.
