AML Supervisory Activity Report | 6 April 2022 - 5 April 2023


The following report sets out AIA's monitoring and supervisory activities between 6 April 2022 and 5 April 2023 in the United Kingdom and Republic of Ireland.

Our role as a Professional Body Supervisor includes both enforcing compliance where breaches are detected in the course of monitoring and supervision and educating members on their AML obligations. The information contained below demonstrates AIA's regulatory work undertaken in the public interest and the high standards of our effective AML monitoring and supervision activity. 

AIA continues to take its role as an anti-money laundering PBS for accountants extremely seriously. We continue to prioritise our role as an AML supervisor and on behalf of the AIA Council and Regulatory Oversight Committee I would like to thank AIA's supervised population for their continued engagement with our monitoring and supervision work.

Although there are encouraging results from monitoring and supervision work it is clear there is still more to achieve and there must be a continued focus on improving levels of AML compliance within AIA's supervised population. This remains one of AIA's fundamental regulatory objectives and we are focussed on engaging members with training and guidance alongside testing compliance through robust monitoring and supervision work, and intervention where appropriate.

In the past year, we have focussed on pushing forward actions identified in the last reporting year and increased the number of reviews completed; we have doubled the number of reviews undertaken and developed a series of targeted online data requests for low risk firms to be rolled out in the following reporting year.

AIA's Regulatory Oversight Committee forms part of an effective governance framework, overseeing and scrutinising the work AIA undertakes as a professional body supervisor (PBS) to ensure we continue to meet the requirements and comply with the regulations.

The accountancy sector continues to play a key role in preventing economic crime and reporting suspicious activity. AIA's commitment to working in the public interest to tackle money laundering and economic crime remains undimmed and we will continue to work with our members to prevent criminals taking advantage of the professional services offered by accountants. 

In 2023-24 AIA will build on changes introduced in this reporting year which lay the foundation for further increasing monitoring and supervision activity and reacting to changes implemented in the UK's AML supervision framework. We aim to publish results of our thematic review into Client Money planned at the end of the previous reporting year and expect changes made to AIA's Sanctions Handbook to allow for a more flexible and effective enforcement regime and timely sanctioning of supervised members where deficiencies are identified in compliance with regulatory requirements.

George Josephakis, Chair, AIA Regulatory Oversight Committee

What is money laundering?

The goal of a large number of criminal acts is to generate a profit for the individual or group that carries out the act; criminals employ a range of techniques to clean their 'dirty money'.

Money laundering is the processing of these criminal proceeds to disguise their illegal origin and to make them appear legitimate, allowing criminals to enjoy these profits without jeopardising their source of income. Criminals do this by disguising the sources, changing the form, or moving the funds to a place where they are less likely to attract attention.

Illegal arms sales, smuggling, and the activities of organised crime, including for example drug trafficking and prostitution rings, can generate huge amounts of proceeds. 

Money laundering is not only a crime itself, but also a key enabler of other serious crimes such as modern slavery, drugs trafficking, fraud, corruption, and even terrorism.

Professionals working in the accountancy, legal and property sectors are targeted because of their expert skills and services (National Risk Assessment 2020), which can give a cloak of legitimacy to illicit cash. This gives professionals a crucial role to play in protecting the UK’s economy, and wider society by reporting suspicious activity.

While money laundering isn’t always obvious, the consequences are severe. Even accidental involvement in money laundering could mean accountants losing their licence, receiving a fine, or facing criminal prosecution.

See more information on what money laundering is and key obligations for accountants.

Our role in tackling money laundering and terrorist financing

Laundering money through the accountancy sector

Accountancy services are attractive to criminals due to the ability to use them to help their funds gain legitimacy and respectability, as implied by accountants' professionally qualified status. Those providing accountancy services remain at risk of being exploited or abused by criminals, especially if accountants become complacent in their regulatory obligations under the MLRs or willingly facilitate money laundering.

The accountancy services considered most at risk of exploitation include:

  • company formation and termination
  • mainstream accounting
  • payroll

Most accountants work hard to prevent and spot money laundering and take necessary action, however some do unknowingly become involved. The key factors behind unwitting involvement continue to be failing to carry out proper due diligence and adequately train staff so they recognise and report potential money laundering concerns.

A very small number of accountants may knowingly cooperate with criminals to launder money.

Our work as an AML supervisor

AIA supervises its practising members for the purposes of the United Kingdom Money Laundering Regulations 2017 (amended 2019), where AIA is listed in schedule 1 as an approved supervisory body. In the Republic of Ireland AIA is a designated body under the Criminal Justice (Money Laundering and Terrorist Financing) Act.

Our work is overseen by HM Treasury, the Office for Professional Body AML Supervision (OPBAS) and the Republic of Ireland Departments of Finance and Justice

We monitor our supervised population and take measures where necessary to ensure compliance, including:

  • ensuring that our supervised population comply with the regulations and obtain necessary approval of their beneficial owners, officers and managers via Criminal Records Checks and intelligence sharing with other professional bodies and law enforcement agencies
  • adopting a risk-based approach and consequently basing the frequency and intensity of our supervision on our comprehensive risk assessment of our supervised population
  • encouraging our supervised population to report actual or potential breaches of the regulations through our whistleblowing process

We take appropriate measures to ensure we review:

  • firm-wide risk assessments carried out by firms
  • client due diligence both at onboarding and as part of an ongoing relationship
  • suspicious activity reporting processes and training
  • the adequacy of our supervised population's policies, controls and procedures and that they have been correctly implemented

We enforce the money laundering regulations and carry out our work as an AML supervisor through:

  • sharing and receiving information to prevent money laundering with other supervisors and law enforcement agencies
  • publishing updated guidance on the regulations
  • undertaking proactive risk-based supervision
  • investigating potential breaches of the regulations and disciplining our supervised population where appropriate
  • reporting suspicious activity where encountered in the course of our monitoring and supervision activity

We work with other professional body supervisors, law enforcement, and regulators in the UK through:

  • The AML Supervisors' Forum (AMLSF)
  • The Accountancy AML Supervisors' Group (AASG)
  • The Intelligence Sharing Expert Working Group (ISEWG)
  • Fraud and Money Laundering Public Private Threat Groups (PPTGs)

We work with other professional body supervisors, law enforcement, and regulators in the ROI through:

  • The AML Steering Committee (AMLSC)
  • The Joint Practices Group
  • The Private Sector Consultative Forum (PSCF)

AIA's Regulatory Oversight Committee (ROC)

The Regulatory Oversight Committee deals with scrutiny, oversight and review of the AIA's regulatory requirements as a recognised supervisory body under the Money Laundering Regulations.

The Committee is empowered to make recommendations to the Council to address areas of weakness or highlight areas of good practice relating to AIA’s AML supervision.

The Committee is made up of independent subject-matter experts. An extra layer of independent scrutiny provides added assurance and drawing on the broad experience of a range of industry professionals helps bring in new thinking from outside AIA.

Supervision tools

AIA operates a risk-based approach to AML supervision. When applying for a practising certificate, applicants agree to co-operate with AIA in our Quality Assurance and Practice Monitoring process.

AIA's monitoring and supervision work ensures compliance with the AIA Constitution, Public Practice Regulations and legal and regulatory requirements such as the Money Laundering Regulations.

The following tools are used to ascertain members' compliance:

  • Onsite Monitoring Visits
  • Desktop Monitoring Reviews
  • AML Compliance Reviews
  • AML Online Reviews (from October 2023)
  • Thematic Reviews
  • Enforcement Visits

Where members are found to be non-compliant with the MLRs, depending on the impact and severity of non-compliance, an Action Plan is agreed to achieve compliance.

Where members exhibit serious non-compliance, act contrary to the AIA Constitution or fail to make adequate progress to achieve compliance following the creation of an Action Plan, AIA's Practice Compliance Committee and Disciplinary Committees may sanction an individual or firm in line with the AIA Constitution and Sanctions Handbook using the following options available:

  • fines
  • conditions placed upon a practising certificate
  • revocation of practising certificate
  • exclusion from membership

Firms and individuals in scope of the regulations

AIA's supervised population is made up of a subset of its overall Members in Practice population.

Some Members in Practice are supervised by other professional body supervisors (PBS) where joint membership is held and this has been agreed with another PBS.

Firms and individuals we regulate that fall in scope of the regulations

As a professional body supervisor, we make sure that the relevant firms and individuals we supervise comply with the regulations and have appropriate controls in place to prevent money laundering.

Relevant supervised population (those supervised for AML purposes only)

In addition to providing pure accountancy services, a proportion of AIA supervised members undertake Trust or Company Service work. A Trust or Company Service Provider (TCSP) is any firm or sole practitioner whose business is to:

  • form companies or other legal persons
  • provide a registered office, business address, correspondence address, administrative address for a company, partnership, other legal person or arrangement
  • act or arrange for another person to act as a:
    • director or secretary of a company
    • partner (or in a similar position) for other legal persons
    • trustee of an express trust or similar legal arrangement
    • nominee shareholder for another person, unless the other person is a company listed on a regulated market which is subject to acceptable disclosure requirements

A person is still considered to be a TCSP provider even if these services are provided incidentally to other accountancy services, or they are provided infrequently or on a one-off basis.

United Kingdom

Republic of Ireland

Firms by risk

The money laundering regulations require that professional body supervisors create risk profiles for all regulated firms and individuals - High, Medium and Low. We use these profiles to identify money laundering risk and prioritise our monitoring and supervision.

Our risk-based approach methodology is controlled by a policy independently scrutinised by the Regulatory Oversight Committee and looks at a range of factors to determine risk, including regulatory history, size, clients and services provided. It also considers mitigation such as AML controls and compliance history.

We take monitoring and supervision action and review firms of all risk levels, prioritising higher-risk firms, as part of our risk-based approach.

Low AML risk does not mean no AML risk.

Number of beneficial owners, officers and managers

The MLRs require all beneficial owners, officers and managers (BOOMs) acting in an AIA supervised firm to be approved by us. They must get a Disclosure and Barring Service check and submit it to us when they first become a BOOM or take on a new role. This ensures that at the time of application the individual has no convictions for a 'relevant offence' as defined in Schedule 3 of the MLRs.

In the reporting period AIA authorised a total of 464 BOOMs (Previous reporting period: 474). 56 applications for authorisation to act as a BOOM were received and 1 application was rejected.

Monitoring and Supervision

Firm reviews 2022-23

We undertook 36 Desktop Monitoring, AML Compliance Reviews or Onsite Monitoring Reviews in the reporting period. This monitoring and supervision was conducted alongside thematic reviews, desk-based monitoring and individual requests made to members.

Our approach

During a Desktop Monitoring, AML Compliance Review or Onsite Monitoring Visit we:

  • issue a Pre-Monitoring Information Request
  • interview AIA members using a standardised framework
  • assess evidence of compliance with the MLRs by reviewing client files and firm policies
  • issue a Findings Report, noting any deficiencies, giving recommendations and requesting evidence of compliance by an agreed deadline
  • sanction members via the Practice Compliance Committee where appropriate  

Improvements to our monitoring and supervision

AIA operates a continuous improvement strategy in order to continue to deliver effective supervision. Improvements during the reporting period included:

  • undertook annual training for reviewers to underpin our monitoring and supervision activity
  • introduced revised guidance for members on what to expect during a monitoring review 
  • implementing AML Online Reviews to deliver targeted questionnaire-style data requests to low-risk members (from October 2023) 

Findings from reviews and follow-up steps taken

Our visits found the following levels of compliance with the MLRs among the supervised firms we reviewed as part of our monitoring and supervision activity:

*following informal action

35 online reviews were judged to be compliant following informal action. 1 review was judged to be compliant at the time of the review.

AIA undertook one Onsite Monitoring Review in the reporting period following which the member’s AML controls were judged to be non-compliant and an Action Plan put in place to achieve compliance. The onsite monitoring review took place at the end of the relevant reporting year as AIA restarted in-person visits, switching focus following the Covid-19 pandemic.

The most common forms of non-compliance with AML/CTF obligations identified throughout AIA’s supervisory activities include:

14 supervised members were referred to the Practice Compliance Committee for failure to comply with the monitoring process.

Following the monitoring and supervision action in the reporting period AIA undertook 7 informal actions (implementing an Action Plan for compliance for members and enforcing compliance) and 5 formal actions (including revoking practising certificates and excluding members).

24 fines were levied in the reporting period totalling £36,250 (Previous reporting year: £10,250).

Reporting suspicious activity

We have a dedicated money laundering reporting officer and deputy to meet our obligations to identify and report suspicions of money laundering.

AIA submits suspicious activity reports (SARs) to the National Crime Agency (NCA) if we identify a suspicion of money laundering through our monitoring and supervision.

To support this vital work we regularly train and update all relevant staff and reviewers to recognise the red flags of money laundering and how to report them.

Where we see trends in criminal activity or suspicious activity in the course of our monitoring and supervision we work with other professional bodies through the Intelligence Sharing Expert Working Group (ISEWG) to issue alerts to the profession and set out appropriate indicators.

Whistleblowing and AML disclosures

AIA has a dedicated whistleblowing hotline and email address for money laundering disclosures.

This means we can be alerted by members of the public in a confidential way about occasions of non-compliance or potential involvement in money laundering or terrorist financing where AIA members are involved.

We remain committed to ensuring that these serious matters can be disclosed confidentially and we have strict policies in place to maintain anonymity.

Anyone who wishes to make a confidential report about an AIA member or firm can do so if it is known or suspected that they:

  • should be regulated under the MLRs but are not; or
  • appear to be ignoring the MLRs; or
  • appear to be engaged (whether inadvertently or knowingly) in money laundering or terrorist financing.

If members of the public wish to report an individual or firm whose supervisor for AML purposes is AIA they can report the matter confidentially to our team.

Emerging risks, areas of focus and the year ahead

Emerging risks

Threats and emerging risks relating to money laundering and terrorist financing activity are changing constantly. Updated information is provided to AIA Members in Practice through a variety of channels to mitigate these risks.

AIA assesses emerging risks through a range of sources, including:

  • through our monitoring and supervision work
  • reports from law enforcement agencies or other authorities

Where we receive information on emerging risks we provide structured alerts to AIA members to inform their training. AIA members are strongly recommended to read these alerts and take appropriate reporting action if they come across situations that involve the circumstances described.

To some extent during the reporting period the risks identified remained similar to those previously identified. Changes to client due diligence during the pandemic made lasting changes to firm's operations and in some cases we have seen a continued reliance on third-party client due diligence software to undertake client verification and due diligence. We would expect firms to be aware of the limits and risks associated with using third-party software and have issued guidance related to this risk.

Although some inherent risks remain similar the legislative framework has been subject to change which may result in an increased risk particularly surrounding client due diligence. During the reporting period Schedule 3ZA of the MLR 2017, settings out prescribed high-risk third countries, has undergone three revisions to amend countries considered to have poor AML controls. 

It is foreseeable with the implementation of the Economic Crime and Corporate Transparency Bill this period of change is likely to continue and the supervised population will be required to implement further change. In addition we have seen the introduction of a Register of Overseas Entities, which introduced additional regulatory requirements for firms conducting verification services.

Furthermore the effects of the HM Treasury consultation into reform of the UK’s AML supervision model may have a serious negative effect on combatting economic crime. With profound and rapid change there is a risk that firms fall behind updating systems and practices which we shall be testing during monitoring and supervision activity.

We consider that other current areas of emerging risk may include:

  • cryptocurrencies
  • Trust or Company Service work
  • government financial schemes
  • money laundering and fraud related to emerging green finance and sustainability
  • displacement activity relating to sanctions on Russian individuals and entities and modifications to the sanctions regime
  • an increase in fraud, money laundering and other economic crime linked to the cost of living, which may affect the risk-based approach of both supervisors and firms 

Further information

AIA’s AML Sector Risk Assessment for Money Laundering and Terrorist Financing in the United Kingdom and the Republic of Ireland sets out information on money laundering and terrorist financing risk that is considered relevant to those individuals and firms supervised by AIA and informs AIA’s risk-based approach to supervision.

Upcoming areas of focus and supervisory activity

In the coming year AIA will continue to support supervised firms and members to help them put strong controls in place to prevent them from being used by criminals. This includes providing updated member guidance, CPD events, intelligence alerts and updating information on emerging risks.

We will also continue to take robust action where our firms and members are found to be failing to protect themselves and the wider public in their responsibilities under MLR.

We will continue to scale up numbers for Onsite Monitoring Visits whilst continuing to leverage the flexibility of Desktop Monitoring Reviews and roll out new online monitoring forms for Low Risk members.

Trust or Company Service Providers (TCSPs) are considered as being at a higher risk of being used by criminals to facilitate money laundering in the National Risk Assessment 2020. We will be continuing to work with other professional body supervisors, OPBAS and the National Economic Crime Centre (NECC) to develop our understanding of the threats, vulnerabilities and risks posed to our supervised population providing these high-risk services and consider whether adjustments are required to AIA's risk-based approach.


Alongside our business as usual monitoring and supervision activity in the reporting period we:

  • initiated a thematic review into members who informed us they held or had access to Client Money in their Annual Return and we will report on the outcome of this review in the following reporting year
  • scoped and prepared for agreement by AIA's Council changes to the Sanctions Handbook to introduce a 'fixed penalty' system for non-compliance to expediate our practice compliance process (introduced June 2023)
  • approximately doubled the number of monitoring and supervision reviews undertaken in the reporting period, meaning 11% of supervised members underwent a review
  • tested and implemented an additional form of AML online monitoring review to begin in the following reporting year 

In the coming year we intend to:

  • continue to implement further improvements to our risk-based approach
  • continuing to invest resources in our monitoring and supervision regime and increasing the number of reviews undertaken
  • continuing to bring enforcement action against firms that are not meeting their responsibilities under the regulations
  • continuing to provide targeted and timely guidance for firms through a schedule of webinars and online guidance
  • continuing to monitor emerging risks and implementing systems and controls as required

With reference to specific projects we intend to:

  • publish new guidance and take regulatory action where appropriate following our thematic review into Client Money
  • conduct a thematic review into SAR Quality, reviewing the quality of SARs submitted by our supervised population and highlighting guidance to members to aid understanding and development of better quality reporting within the accountancy sector

Guidance, Resources and Useful Links

Published by AIA:

AIA maintains extensive AML guidance for members, including sensitive AML alerts and emerging risks, templates and checklists, and events, within the members' area of the website.

Examples of guidance we provide include:

  • AML Guidance for the Accountancy Sector (AMLGAS) approved by HM Treasury
  • MLR Requirements Guidance
  • MLR Compliance Checklist
  • Customer Due Diligence
  • Reporting Discrepancies in the Register
  • Reporting Suspicious Activity
  • Firm-Wide Risk Assessment
  • PEPs and Sanctions
  • Record Keeping
  • Staff Training
  • Role of the MLRO (including Sample MLRO Report)
  • Sample Firm AML Policy and Procedures
  • Guidance on Court and Production Orders
  • Crime Indicators for Accountants
  • Acting as a Trust or Company Service Provider

Regular AML updates are provided online to AIA Members who may watch recorded versions here. All past webinars are available for members on demand.

Updates delivered in the past year include:

  • Proliferation Financing Risk
  • Bringing SARs to Life (with the National Crime Agency/UKFIU)
  • Understanding Geographic Risk
  • Register of Beneficial Ownership - A Practical Guide (Ireland)
  • Client Verification, Suspicious Activity and Discrepancy Reporting
  • An Accountant's Crucial Role in the Fight Against Money Laundering
  • AML/CTF for Malaysia

AIA maintains a library of AML-related articles for members to access on demand, for example:

As part of an alerts sub-group of the Intelligence Sharing Expert Working Group (ISEWG) we issued 10 accountancy-specific money laundering alerts to Money Laundering Reporting Officers of our supervised firms and the wider sector:

  • Bribery and Corruption Future Threats for the UK
  • Family Offices and Their Role in Laundering the Proceeds of Crime
  • AASG - Preventing the Trafficking of Those Impacted by the Conflict in Ukraine
  • Financial Sanctions Evasion Typologies: Russian Elites and Enablers
  • Missing Trader Fraud
  • Money Laundering Risks Relating to the UK Investor Programme
  • Unregistered Over the Counter Crypto Brokers
  • Register of Overseas Entities - Verification Work
  • Potential Indicators of Sexual Exploitation
  • Money Laundering via Scrap Metal Businesses

Published by the National Crime Agency:

Published by Government:

  • UK National Risk Assessment - UK government's national assessment of AML risk, setting out issues in several areas of work including legal and trust and company service work.
  • ROI National Risk Assessment - Ireland’s money laundering and terrorist financing (ML/TF) national risk assessment (NRA) aim to identify, understand and assess the money laundering and terrorist financing risks faced by the Republic of Ireland.
  • ROI TCSP Risk Assessment - Ireland's TCSP risk assessment aims to identify, understand and assess the money laundering risks faced by firms offering these specialist services.

Note: AIA’s responsibilities as a professional body supervisor under Schedule 1 of the Money Laundering Regulations 2017 involve the handling of sensitive intelligence and information which is used to combat the risk of money laundering and terrorist financing. This Annual Report does not include all aspects of AIA’s monitoring and supervision strategy and some information may not be disclosed to protect the public interest.