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Criminal Record Checks - BOOMs
Under the Money Laundering Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017) the AIA must approve all beneficial owners, officers and managers (BOOMs) in firms that we supervise.
This approval process seeks to ensure that no BOOM has been convicted of a relevant offence as set out in Schedule 3 to the MLR 2017. Amendments in theMoney Laundering Regulations 2019(MLR 2019) clarify that individuals seeking BOOM approval from supervisory bodies such as AIA must provide information which enables a supervisory body to determine whether the applicant has been convicted of a relevant offence.
Individuals who have an unspent relevant criminal conviction set out in Schedule 3 to the MLR 2017 cannot be approved by AIA as a member engaged in public practice. There is no right of appeal under the MLR 2017 and MLR 2019, although a person can re-apply once the conviction is spent.
The relevant convictions in Schedule 3 to the MLR 2017 are economic crimes such as fraud, bribery, dishonesty, tax offences and breaches of the money laundering regulations. Driving offences are not included in the list. Nonetheless, AIA members should be aware that some convictions that are not included within Schedule 3 may still lead to disciplinary action.
What do you need to do?
Firms must take reasonable care to ensure that no-one is appointed, or continues to act, as a BOOM without AIA approval.
In order to be approved, AIA must obtain evidence of a Disclosure and Barring Service (DBS) check, which includes a copy of your criminal record. This is called ‘basic disclosure’ check. The check will only show criminal convictions that are not ‘spent’.
For the basic disclosure checks, firms and sole practitioners should use the following disclosure services:
The disclosure service chosen will be dependent on where BOOMs live and work.
Any person who is a BOOM with relevant unspent convictions will be committing a criminal offence with the potential of up to two years in prison and/or a financial penalty.
A relevant offence is a criminal offence that is set out in Schedule 3 to the MLR 2017.
All AIA supervised firms which registered for AML supervision with the AIA after 26 June 2016 will have provided DBS certificates as part of the registration process and will not be required to provide DBS certificates during any subsequent AML review. As part of our supervisory visits, AIA Quality Assurance Advisers and AML Reviewers will be reviewing declared BOOMs and requiring evidence that all BOOMs in our supervised firm have had a DBS check and that there are no appointed BOOMs with a relevant unspent Schedule 3 criminal conviction.
What if someone takes up a new position in my firm as a BOOM?
The MLR require that you inform AIA of any changes to BOOMs in a firm by contacting firstname.lastname@example.org.
Any person who is a BOOM after 26 June 2018 without AIA's approval (i.e. BOOM with relevant unspent convictions) will be committing a criminal offence with the potential of up to two years in prison and/or a financial penalty.
What if a BOOM in my firm has a relevant unspent criminal conviction?
In accordance with the MLR, firms and sole practitioners must inform AIA if a BOOM has a relevant unspent criminal conviction as set out in Schedule 3 to the MLR 2017 within 30 days of the date on which the firm and sole practitioner becomes aware of the BOOM’s conviction by emailing email@example.com. Failure to report may lead to disciplinary action.
In such cases, the BOOM will no longer be approved by AIA (or any other supervisor) as being a fit and proper person to be engaged in public practice.
AIA disciplinary process
Failure to seek approval for BOOMS or failure to report relevant unspent Schedule 3 criminal convictions for BOOMs of AIA supervised firms may lead to disciplinary action.
Members who have unspent Schedule 3 criminal convictions will be automatically referred to AIA's disciplinary process.
A Beneficial Owner can be:
A sole practitioner;
A partner, or LLP member, in a firm who holds (directly or indirectly) more than 25% of the capital, or profits or voting rights; or exercises ultimate control;
A shareholder in a limited company who holds (directly or indirectly) more than 25% of the shares or voting rights; or ultimately owns or exercises ultimate control.
An Officer can be:
A partner in a partnership (including a Scottish Limited Partnership (SLP));
A member in a limited liability partnership (LLP); or partnership
A director or company secretary in a limited company; and
A member of the firm’s management board or equivalent.
The nominated officer (the MLRO);
Members of the board of directors (or if there is no board, of its equivalent management body) or of its senior management as the officer responsible for the relevant person’s compliance with MLRs); or any other principal, senior manager, or member of a management committee who is responsible for setting, approving or ensuring the firm’s compliance with the firm’s Anti-Money Laundering policies and procedures.